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entitled 'Telecommunications: FCC Has Made Some Progress in the
Management of Its Enforcement Program but Faces Limitations, and
Additional Actions Are Needed' which was released on March 13, 2008.
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Report to the Chairman, Subcommittee on Telecommunications and the
Internet, Committee on Energy and Commerce, House of Representatives:
United States Government Accountability Office:
GAO:
February 2008:
Telecommunications:
FCC Has Made Some Progress in the Management of Its Enforcement Program
but Faces Limitations, and Additional Actions Are Needed:
GAO-08-125:
GAO Highlights:
Highlights of GAO-08-125, a report to the Chairman, Subcommittee on
Telecommunications and the Internet, Committee on Energy and Commerce,
House of Representatives.
Why GAO Did This Study:
The Federal Communications Commission (FCC) annually receives about
100,000 complaints from individuals and companies. FCC has the
authority to investigate these complaints and take enforcement action
if it finds a violation of the telecommunications laws and rules, which
are designed to ensure, for example, that individuals have access to
911 services and a wider affordable range of communication services.
As requested, this report reviews FCC’s enforcement program and (1)
summarizes the number and type of complaints received, investigations
conducted, and enforcement actions taken by FCC from 2003 through 2006;
(2) discusses how FCC assesses the impact of its enforcement program;
and (3) discusses challenges FCC faces in providing complete and
accurate information on its enforcement program. To address these
objectives, GAO analyzed FCC’s databases, interviewed FCC officials,
telecommunications executives, and experts.
What GAO Found:
According to GAO’s analysis of FCC data, between 2003 and 2006, the
number of complaints received by FCC totaled about 454,000 and grew,
from almost 86,000 in 2003, to a high of about 132,000 in 2005. The
largest number of complaints alleged violations of the do-not-call list
request and telemarketing during prohibited hours. FCC processed about
95 percent of the complaints it received. FCC also opened about 46,000
investigations and closed about 39,000; almost 9 percent of these
investigations were closed with an enforcement action, and about 83
percent were closed with no enforcement action. GAO was unable to
determine why these investigations were closed with no enforcement
action because FCC does not systematically collect these data. FCC told
GAO that some investigations were closed with no enforcement action
because no violation occurred or the data were insufficient.
FCC assesses the impact of its enforcement program by periodically
reviewing certain program outputs, such as the amount of time it takes
to close an investigation, but it lacks management tools to fully
measure its outcomes. Specifically, FCC has not set measurable
enforcement goals, developed a well-defined enforcement strategy, or
established performance measures that are linked to the enforcement
goals. Without key management tools, FCC may have difficulty assuring
Congress and other stakeholders that it is meeting its enforcement
mission.
Limitations in FCC’s current approach for collecting and analyzing
enforcement data constitute the principal challenge FCC faces in
providing complete and accurate information on its enforcement program.
These limitations make it difficult to analyze trends; determine
program effectiveness; allocate Commission resources; or accurately
track and monitor key aspects of all complaints received,
investigations conducted, and enforcement actions taken.
Figure: Disposition of FCC’s 39,000 Closed Investigations, Calendar
Years 2003 through 2006:
[See PDF for image]
This figure is a pie-chart, depicting the following data:
Investigation closed with no enforcement action taken; unable to
determine reason why from databases: 83%;
Investigation closed; action taken: 9%;
Investigation closed; unable to determine if enforcement action was
taken: 8%.
[End of figure]
What GAO Recommends:
The Chairman, FCC, should improve FCC’s data collection and analysis to
help it better manage its enforcement efforts and develop and implement
performance goals and outcome measures for its enforcement program. FCC
said it has already implemented measures that address both
recommendations; however, the actions it identified do not fully
address our recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-125]. For more information, contact Mark
Goldstein at (202) 512-2834 or goldsteinm@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Complaints Received by FCC Have Increased and the Majority of
Investigations Have Not Resulted in Enforcement Actions:
FCC's Enforcement Bureau Assesses Some Program Outputs, but Lacks Key
Management Tools to Measure Outcomes and Manage Its Program:
FCC's Enforcement Bureau Has Not Fully Defined Its Strategy and Has No
Specific Goals or Performance Measures:
An Inadequate Data Management System Challenges the Enforcement
Bureau's Ability to Carry Out Its Responsibilities:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Comments from the Federal Communications Commission:
Appendix III: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Divisions and Responsibilities of FCC's Enforcement Bureau:
Table 2: Summary of Enforcement Bureau's Approximately 39,000 Closed
Investigations, Calendar Years 2003 through 2006:
Figures:
Figure 1: Number of Complaints Received and Processed by the Consumer
and Governmental Affairs Bureau, Calendar Years 2003 through 2006:
Figure 2: Top 10 Complaints Received by the Consumer and Governmental
Affairs Bureau, Calendar Years 2003 through 2006:
Figure 3: Number of Years Consumer and Governmental Affairs Bureau
Complaints Were Pending, as of December 31, 2006:
Figure 4: Number of Investigations Opened, Closed, and Pending by the
Enforcement Bureau, Calendar Years 2003 through 2006:
Figure 5: Disposition of Enforcement Bureau's 39,000 Closed
Investigations, Calendar Years 2003 through 2006:
Figure 6: Amount of Monetary Forfeitures Assessed and Payments
Negotiated through Consent Decrees, Calendar Years 2003 through 2006:
Figure 7: Number of Years FCC Enforcement Bureau Investigations Were
Pending, as of December 31, 2006:
Abbreviations:
CGB: Consumer and Governmental Affairs Bureau:
FCC: Federal Communications Commission:
FTC: Federal Trade Commission:
GPRA: Government Performance and Results Act of 1993:
OMD: Office of the Managing Director:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
February 15, 2008:
The Honorable Edward J. Markey:
Chairman:
Subcommittee on Telecommunications and the Internet:
Committee on Energy and Commerce:
House of Representatives:
Dear Mr. Chairman:
The Federal Communications Commission (FCC) is responsible for
enforcing the Communications Act of 1934, as amended (the Act), and
Commission rules and orders. Each year, FCC receives approximately
100,000 complaints from consumers and companies. FCC has the authority
to investigate complaints and to take enforcement action if it finds
that there have been violations of the various telecommunications laws
and Commission rules that are designed to protect the consumer, ensure
public safety, and encourage competition. Thus, it is important that
FCC have a strong and effective enforcement program that allows it to
act on these complaints in an efficient and equitable manner.
Within FCC, two bureaus--the Consumer and Governmental Affairs Bureau
(CGB) and the Enforcement Bureau--have responsibility for handling the
hundreds of thousands of complaints that FCC receives from individuals
and companies. CGB is primarily responsible for processing the majority
of the complaints that FCC receives from individuals. The Enforcement
Bureau is the primary bureau within FCC that is responsible for
enforcing the Act's provisions and FCC's rules and orders.
You requested that we review FCC's enforcement program. This report (1)
summarizes the number and types of complaints received, investigations
conducted, and enforcement actions taken by FCC during calendar years
2003 through 2006; (2) discusses how FCC assesses the impact of its
enforcement program; and (3) discusses challenges FCC faces in
providing complete and accurate information on its enforcement program.
To provide information on the number and types of complaints received,
investigations conducted, and enforcement actions taken by FCC from
2003 through 2006, we analyzed data entirely from FCC's six databases
for calendar years 2003 to 2006.[Footnote 1] We primarily focused our
analysis on the approximately 46,000 investigations that FCC conducted
during this time period. We did not review the paper case files that
FCC maintains. Our focus was on the database systems for FCC's
enforcement program. To assess the reliability of FCC's databases, we
performed a separate assessment of each of the five databases and of
CGB's database. We identified the degree of missing, duplicate, and
invalid records and analyzed certain data fields to assess the quality
of the data. We found some inconsistencies and limitations in the
databases, which we reported to FCC. We also reviewed FCC's procedures
for handling complaints, conducting investigations, and taking
enforcement actions. While we discuss limitations of the data in this
report, we determined that the data were sufficiently reliable for us
to present some general information regarding the number and types of
complaints, investigations and enforcement actions.
To identify the challenges FCC faces, we interviewed officials at FCC
and 15 companies that are subject to FCC's enforcement, and five
experts in telecommunications. We selected the companies based on the
type of telecommunications services provided (radio and television
broadcasting, cable and satellite, wireless and wireline
telecommunications services) and FCC and industry data for 2006. To
assess how FCC measures the impact of its enforcement program, we
reviewed the agency's Strategic Plan for 2006 through 2011, Fiscal Year
2006 Performance and Accountability Report, Fiscal Year 2006
Congressional Justification of Estimates, and the FCC's enforcement
manual to identify enforcement goals and performance measures. We also
interviewed FCC officials about performance goals and measures and
compared FCC's efforts with performance management practices identified
in prior GAO reports. We conducted this performance audit from November
2006 through December 2007 in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
See appendix I for a more detailed explanation of our scope and
methodology.
Results in Brief:
Overall, FCC received and processed hundreds of thousands of
complaints, conducted tens of thousands of investigations, and took a
limited number of enforcement actions during calendar years 2003
through 2006. According to our analysis of FCC's CGB database for 2003
through 2006, during this period, the number of complaints received by
FCC's CGB totaled 454,000 and grew, from almost 86,000 in 2003, to a
high of about 132,000 in 2005. The CGB processed about 95 percent of
these complaints by sending a letter of acknowledgment to the
complainant and, where appropriate, referred them for resolution to the
company that was the subject of the complaint. The largest number of
complaints alleged violations of the Telephone Consumer Protection Act
(TCPA),[Footnote 2] including violations of the do-not-call list
request and telemarketing during prohibited hours. As of December 2006,
about 23,000 complaints remained open, with 16 percent of them open
from 1 to 4 years. In addition, based on our analysis of FCC's
Enforcement Bureau's databases, from 2003 through 2006, FCC's
Enforcement Bureau conducted about 46,000 investigations. These
investigations were in response to complaints that the Enforcement
Bureau received directly, complaints received by CGB, audits and
inspections, and self-initiated inquiries. As of December 2006, the
Enforcement Bureau had closed about 39,000 of the 46,000
investigations. Based on our analysis of FCC's Enforcement Bureau's
databases for 2003 through 2006, about 9 percent, or almost 3,400, of
these investigations were closed with an enforcement action, and
approximately 83 percent, or about 32,200, were closed with no
enforcement. We were not able to determine whether enforcement actions
had been taken in the remaining 3,200 closed investigations or to
determine why investigations were closed with no discernible
enforcement action because the Enforcement Bureau databases did not
collect this information systematically. However, Enforcement Bureau
officials told us that some investigations may be closed with no
enforcement action for such reasons as insufficient information or a
determination that no violation occurred. Our analysis of FCC's
Enforcement Bureau databases for 2003 through 2006 shows that when FCC
took an enforcement action, it generally issued an admonishment or
notice of violation, sometimes assessed a fine, and rarely relied on
more serious enforcement actions. For example, FCC did not issue any
order to cease and desist during this period. As of December 2006,
about 7,200 investigations remained open and almost 1,400 (about 19
percent) were open for 1 to 4 years. According to FCC officials, from
2003 through 2006 the Commission assessed $73 million in fines and
payments negotiated through consent decrees, of which about $53
million, or 72 percent, has been collected.
While FCC assesses the impact of its enforcement program by
periodically reviewing certain program outputs, it lacks the management
tools needed to fully measure its outputs and manage its program.
Specifically, FCC's Enforcement Bureau has not set specific enforcement
goals, developed a well-defined enforcement strategy, or established
performance measures that are linked to the enforcement goals. FCC
measures outputs, such as the extent to which it takes enforcement
action within its statute of limitations requirement for assessing
fines or the time it takes to close investigations, but it does not
measure outcomes such as the effects of its enforcement actions on
levels of compliance in certain areas. Without key management tools,
FCC may have difficulty fully assuring Congress and other stakeholders
that it is meeting its enforcement mission of protecting the consumer,
ensuring public safety, and encouraging competition.
Limitations in FCC's current approach for collecting and analyzing
enforcement data constitute the principal challenge FCC faces in
providing complete and accurate information on its enforcement program.
These limitations make it difficult to conduct trend analysis,
determine program effectiveness, allocate Commission resources, or
accurately track and monitor key aspects of all complaints received,
investigations conducted, and enforcement actions taken. Currently, the
Enforcement Bureau uses five separate databases and manually searches
tens of thousands of paper case files to track and monitor the extent
to which each of its divisions takes enforcement action within its
statute of limitations requirement for assessing fines or the time it
takes to close an enforcement case. Consequently, we could not use the
Enforcement Bureau's databases to obtain bureauwide information on the
1-year statute of limitations for imposing monetary forfeitures, the
speed with which the Enforcement Bureau closed an investigation, the
reasons for closing investigations with no enforcement action, or the
amount of the fines FCC assessed. Our past work has shown that when
data management systems are not integrated and compatible, excessive
use of resources and inconsistent analysis of program results can
occur.
To develop a more efficient and effective approach to enforcing
communications laws and Commission rules and orders, we recommend that
the Chairman of the Federal Communications Commission:
* improve how FCC collects and analyzes data on complaints received,
investigations conducted, and enforcement actions taken to help it
better manage and understand the outcomes and net results of
enforcement efforts and provide Congress and stakeholders with timely
and accurate information that can be used to hold FCC accountable for
accomplishing its enforcement mission under the Act; and:
* develop and implement performance management practices for the
Enforcement Bureau, such as a well-defined strategy that includes
specific goals and performance measures, in order to assess the
effectiveness of FCC's enforcement program.
We provided a draft of our report to FCC for review and comment. FCC
commented that it has already implemented measures that address both of
our recommendations. In addition, FCC disagreed with our methodology
and several of our findings. FCC's comments appear in appendix II. FCC
also provided over 100 pages of attachments in its comments. Because
these attachments cover time periods that are after the scope of our
audit and are voluminous, we have decided to characterize the
attachments rather than include them in their entirety.[Footnote 3] FCC
also provided technical and legal clarifications, which we incorporated
as appropriate. We also clarified our methodology for analyzing FCC's
databases. These technical and legal changes did not affect our
findings, conclusions, or recommendations.
We are pleased that FCC is moving in the direction suggested by our
recommendations, but we disagree with FCC that it has already fully
implemented them; we also disagree with FCC's criticisms of our
methodology and findings. We believe that our report provides an
accurate and sufficient overview of FCC's processes for handling
complaints, conducting investigations, and taking enforcement actions
and the results of FCC's efforts to enforce telecommunications laws and
the Commission's rules from 2003 through 2006, the latest year complete
data was available. We also exercised caution in writing our report to
ensure that we explained that the results of our analysis are based
entirely on FCC's databases. In our view, FCC's concerns about the
accuracy of our findings stem from (1) the challenges FCC faces in not
having a data management system that will allow it to systematically
collect and analyze information about complaints, investigations, and
enforcement actions and (2) the Commission's use of an approach that
differs significantly from ours. We discuss the challenges posed by
FCC's data management system in our report and point out that without
improvements, such as we recommend, FCC cannot readily analyze trends,
determine program effectiveness, allocate Commission resources, or
accurately track and monitor key aspects of all complaints received,
investigations conducted, and enforcement actions taken. In addition,
the Commission's use of data for 2007 and data from the thousands of
paper case files, both of which were outside the scope of our analysis,
necessarily led to findings that differed from ours, but these
differences do not affect the appropriateness of our methodology or the
accuracy of our findings.
FCC disagreed with our methodology and our findings, conducted its own
analyses, and included the results of these analyses in attachments to
its comments. We believe that our methodology meets generally accepted
government auditing standards which require that we plan and perform
the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings, conclusions, and recommendations.
However, while FCC did not provide its methodology, its overall
approach differs significantly from the approach we used. In its
comment letter, FCC acknowledged that it had to review about 46,000
paper case files and use its databases to determine the reasons why
investigations were closed with no enforcement action. FCC also
acknowledged that it conducted a manual review of a variable in its
database that we could not use because of reliability concerns. As
noted in our report, the data that we used for our analyses are derived
directly from FCC's databases. We did not review the 46,000 paper case
files that FCC maintains. Our focus was on the database systems for
FCC's enforcement program.
FCC also disagreed with our finding that 83 percent of its
investigations were closed with no enforcement action and that there
were no justifications for these closures in its databases. In its
comments, FCC stated that based on its analysis of its databases and
paper case files, 85 percent of its investigations were closed with no
enforcement action and 96 percent of these closures were due to
findings of compliance or insufficient information from the
complainant. To determine the reasons why investigations were closed,
we attempted to identify a reliable variable in FCC's enforcement
database that clearly categorized the justifications for closing an
investigation with no enforcement action. No such variable exists. As
an alternative, FCC referred us to open-ended text variables. We
reviewed these variables, and in June 2007, told FCC officials that we
could not use these variables because they are frequently blank or, if
completed, contain varying amounts of text to justify the actions or
lack thereof. While such information may be useful to the FCC analysts
working on the complaints, they are not usable for management
information purposes. In addition, as FCC acknowledged in its comments,
to determine the reasons why its investigations were closed with no
enforcement action, it had to review approximately 46,000 paper case
files. As noted in this report, the data that we used for our analysis
are derived entirely from FCC's databases. We did not review the 46,000
paper case files that FCC maintains. Our focus was on the database
systems for FCC's enforcement program. Our understanding is that FCC
analysts reviewed the information from its databases and paper case
files and categorized the reasons for approximately 46,000
investigations in response to our initial analysis. We believe that FCC
should have data management systems that allow it to generate this type
of information automatically, reliably, and regularly. Consequently, we
stand by our recommendation that FCC needs to improve how it collects
and analyzes data on complaints received, investigations conducted, and
enforcement actions taken to better manage its enforcement program.
Background:
Two bureaus within FCC--CGB and the Enforcement Bureau--have
responsibilities for developing and implementing procedures for
processing complaints, conducting investigations, and taking
enforcement action if appropriate. CGB has primary responsibility for
processing the majority of the complaints that FCC receives and for
responding to other consumer complaints and inquiries.[Footnote 4] For
example, some of these complaints allege that (1) common carriers may
have violated telecommunications laws and FCC rules; (2) television and
radio broadcasters may have violated indecency rules; and (3)
nonregulated entities, such as telemarketers, may have violated some
aspects of the TCPA, such as the do-not-call list request. CGB may also
receive complaints and inquiries about consumer issues from
congressional offices and FCC Commissioners. Under CGB's process,
complaints are logged upon receipt into CGB's database, and
acknowledgment letters are sent to the complainants notifying them that
FCC received the complaint. Complaints against common carriers are
processed according to the procedures outlined in FCC's regulations,
which require FCC to forward the complaint to the carrier that
allegedly committed the violation and ask the carrier to respond to the
complainant and FCC.[Footnote 5] If the common carrier responds to the
complainant by, for example, issuing a refund or explaining the
charges, then CGB takes no further action. However, if the company does
not respond, then CGB initiates additional contact after 30 days and,
again, after 60 days, to get the complaint resolved. A CGB official
told us that CGB also receives a copy of the carrier's response to the
complaint. According to FCC, voluntary action by the carrier to achieve
consumer satisfaction is the expected outcome for most of the
complaints CGB receives. However, if this outcome is not achieved, the
complainant may pursue the matter by filing a formal complaint with
FCC's Enforcement Bureau.[Footnote 6] CGB responds to other complaints,
such as those concerning junk faxes, by acknowledging receipt of the
complaint and then closing the case.
Formed in November 1999, the Enforcement Bureau consolidates the
enforcement functions of FCC's policy bureaus, which formerly carried
out their own investigations and enforcement activities.[Footnote 7]
The areas of enforcement that are handled by the Enforcement Bureau are
consumer protection, local competition, and public safety. The
Enforcement Bureau has four divisions and 25 field offices in three
geographic regions. These five divisions are responsible for conducting
investigations and taking enforcement actions, if appropriate (see
table 1).[Footnote 8]
Table 1: Divisions and Responsibilities of FCC's Enforcement Bureau:
Division: Investigations and Hearings;
Primary responsibilities: Investigates and takes or recommends
enforcement action against (1) broadcast licensees for violations of
nontechnical Commission rules concerning issues, such as indecency,
enhanced underwriting, unauthorized assignments and transfers of
control of licenses; (2) wireless licensees for violations of
nontechnical rules involving such issues as auction collusion and
unauthorized assignments and transfer of control of licensees; (3)
common carriers in cases involving alleged or suspected misconduct; and
(4) in cases involving suspected violations of the laws and rules
governing universal service. This division also serves as trial staff
in formal hearings.
Division: Spectrum Enforcement;
Primary responsibilities: Investigates and takes or recommends
enforcement action for violation of public-safety related and other
technical rules, such as those governing interference, tower marking
and lighting, the Emergency Alert System, 911, Enhanced 911, and
compliance with operational provisions of licenses. This division also
handles enforcement action in the areas of unauthorized equipment,
network reliability or network outages, and digital television, among
others.
Division: Telecommunications Consumers;
Primary responsibilities: Investigates and takes or recommends
enforcement action for violations of consumer-related obligations of
common carriers and other telecommunications entities, such as
slamming, junk faxes, and prohibited calls to do-not-call list request
subscribers, and adjudicating formal complaints filed against
telecommunications entities that raise consumer issues and proceedings
on the accessibility of telecommunications services and equipment to
persons with disabilities.
Division: Market Disputes Resolution;
Primary responsibilities: Resolving complaints by market participants,
entities, or organizations against common carriers for alleged
violations of the Act that are filed under section 208 of the Act;
resolving complaints filed by cable operators, telecommunications
carriers, utilities, and other parties relating to the reasonableness
of rates, terms, and conditions for pole attachments as stated under
section 224 of the Act; and facilitating settlements of disputes by
engaging the parties in mediation.
Division: Field Offices;
Primary responsibilities: Responding to spectrum and homeland-security-
related safety of life and public safety matters, investigating
interference complaints, inspecting FCC-regulated entities, and taking
or recommending enforcement action for violations of public safety and
technical rules.
Source: FCC.
[End of table]
The Enforcement Bureau generally investigates alleged violations of
telecommunications and Commission rules in response to complaints
received directly from an individual or an entity or from complaints it
selected from CGB's database. After a complaint is received,
Enforcement Bureau staff review it to determine whether it meets FCC's
sufficiency of evidence and jurisdictional requirements. If a complaint
does not meet these requirements, an investigation is not conducted.
While Enforcement Bureau officials told us that FCC's enforcement work
is primarily complaint-based, the bureau does initiate a few
investigations in response to audits or observations made during the
normal course of agency business, such as research during other
investigations. If a violation is found during an investigation, then
the Enforcement Bureau may take enforcement action.
Once a violation is found, the Commission may impose a range of
enforcement actions. According to FCC, potential enforcement actions
include the following:[Footnote 9]
* Admonishment. A notice that serves to inform the subject that its
action violates the Act or Commission rules, orders, or terms and
conditions of authorizations and allows the Enforcement Bureau to
establish a record of enforcement action in cases where a forfeiture is
not warranted.
* Cease and desist order. An order requiring a person to cease and
desist from violation of the Act or Commission rules.[Footnote 10]
* Citation. Provides notice to parties who do not ordinarily conduct
business with FCC (i.e., persons not holding or applying for Commission
authorizations) that their actions violate the Act or FCC rules and
could subject them to a monetary forfeiture. A forfeiture may not be
issued for the subject of a citation but may be imposed for subsequent
violations.
* Consent decree. An agreement between FCC or the Enforcement Bureau
and the party of an investigation that sets forth the terms and
conditions of accepted behavior to which that subject must conform in
exchange for closure of the investigation or forfeiture proceedings. A
consent decree generally includes a compliance plan and a voluntary
contribution to the U.S. Treasury.
* Criminal and civil penalties. The Act provides for a fine of not more
than $10,000 or a criminal penalty of imprisonment for up to 1 year for
a first-time conviction of willfully and knowingly violating the Act
(47 USC § 501). A second conviction for violating any provision of the
Act is punishable by a fine of not more than $10,000 or imprisonment
for up to 2 years. FCC has no authority to initiate a criminal action
against a subject for violation of the Act; instead, FCC must refer
such a matter to the Department of Justice.
* Debarment.[Footnote 11] FCC's debarment rules establish procedures to
prevent persons who have been convicted of or held civilly liable for
attempting to commit or committing a variety of offenses from engaging
in activities with or related to universal service mechanisms. The
offenses covered by the rule include criminal fraud, theft,
embezzlement, forgery, bribery, falsification or destruction of
records, making false statements, receiving stolen property, making
false claims, and obstruction of justice or other fraud or criminal
offense arising out of activities associated with or related to
universal service mechanisms, such as the schools' and libraries'
support mechanisms.
* Equipment seizure (In Rem seizure). Primarily used in cases involving
unlicensed or pirate radio stations where FCC field agents, in
conjunction with the U.S. Marshal Service and the U.S. Attorney's
Office, seize radio transmitting equipment.
* Monetary forfeiture. A fine assessed for violation of the Act or FCC
rules, orders, or terms and conditions of an authorization. The Act
provides two methods by which FCC may assess monetary forfeitures. The
most commonly used method is to issue a notice of apparent liability.
This notice, which is a proposed action, informs the subject that FCC
believes that a violation has occurred and that a forfeiture in a
specified dollar amount is warranted. The other method is the issuance
of a notice of opportunity for hearing. This hearing process is
typically used in application hearing designation and revocation
proceedings and entitles the subject to a full hearing before an
administrative law judge.
* Notice of violation. A notice generally issued by an FCC field office
to an FCC-regulated entity concerning a violation of laws or rules that
is identified during an inspection. The notice requires the subject to
respond to the allegation and, based on the response, additional action
may be taken.
* Revocation of license. Reserved for the most egregious violations of
the law that raise serious questions about a licensee's basic
qualifications to be and remain a licensee. Such offenses include
misrepresentation, lack of candor, and repeat violations of the Act or
Commission rules and orders.[Footnote 12]
The Commission may assess a monetary forfeiture for violations of the
Act, the Commission's rules, a Commission order, or terms and
conditions of an authorization. The Commission's general legal
authority can be found in Section 503 of the Act.[Footnote 13] Section
503 of the Act sets forth maximum forfeiture amounts for violations by
licensees or regulated entities. Section 503(b) of the Act requires
that the Commission 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 any other such matters as justice may require. These
requirements are implemented by FCC rules.[Footnote 14] In 1997, to
help implement these criteria, the Commission adopted Guidelines for
Assessing Forfeitures.[Footnote 15] These guidelines are used to help
determine the amount of a forfeiture for a specific violation and to
provide a base forfeiture amount for most of the common violations. The
base amount can be adjusted up or down, depending on the existence of
factors meeting the adjustment criteria, such as a history of prior
violations. Although the guidelines represent the general method for
assessing forfeitures, the Commission has discretion to depart from
them when appropriate.
Section 503 (b) of the Act also limits the time within which FCC may
assess a monetary forfeiture. For common carriers and all other
entities except broadcast licensees, the notice of apparent liability
or notice of opportunity for hearing is required to be issued within 1
year of the violation. For broadcast licensees, the notice of apparent
liability or notice of opportunity for hearing may be issued if the
violation occurred during the current license term or within the last
year, whichever is earlier.
After a fine is assessed, information on the fine is sent to the Office
of the Managing Director (OMD) for tracking and monitoring of payment.
OMD has responsibility within FCC for keeping track of what fines have
and have not been paid. The Enforcement Bureau receives reports from
OMD and has access to OMD's database to monitor payment, as well.
Although the Enforcement Bureau and the Commission have the legal
authority to impose fines, the U.S. Department of Justice has the
authority to collect unpaid fines. Thus, when a case is past due, the
Enforcement Bureau refers the case to its Office of General Counsel,
which then determines whether or not to refer the case to the U.S.
Department of Justice for collection. Once the U.S. Department of
Justice receives a referral from FCC's Office of General Counsel, it
can decide whether or not to pursue a case or to collect a fine.
Companies have several opportunities to respond to FCC's assessment of
a monetary forfeiture. For example, after a notice of apparent
liability is issued, a company may submit information, including
financial information, and request that the fine amount be reduced or
cancelled. If FCC decides to move forward with the fine (whether the
original amount or a reduced amount) and the company disagrees with the
fine, then the company can ask for the fine to be reviewed. Companies
may request that the Commissioners review the fine by filing a petition
for reconsideration of an Enforcement Bureau forfeiture order or
submitting an application for review of a fine issued by the
Commission.
At any point during an investigation or after a fine has been assessed,
a company may request to settle with FCC and enter into a consent
decree. A consent decree terminates the investigation or forfeiture,
and the subject of the investigation agrees to certain terms and
conditions but typically does not admit or deny any wrongdoing. The
terms and conditions usually include specific steps to correct the
violation and ensure future compliance, as well as a voluntary monetary
contribution to the U.S. Treasury.
In commenting on a draft of this report, FCC disagreed with our
description of its process for responding to consumer complaints and
said that during the course of our review it began responding to 100
percent of consumer complaints. Our description of FCC's process for
responding to consumer complaints is based on information it provided
to us during the course of our review. During the course of our review,
FCC stated that it planned to change its process for responding to
consumer complaints. However, in the 100 page attachment to its letter
FCC did not provide any documentation explaining how or when the
process changed. Thus, we were not able to evaluate any changes that
FCC may have made to it process for responding to consumer complaints.
As part our routine recommendation follow-up work, we will inquire
about FCC's progress in this area.
Complaints Received by FCC Have Increased and the Majority of
Investigations Have Not Resulted in Enforcement Actions:
Overall, FCC received and processed hundreds of thousands of complaints
and conducted thousands of investigations but took a limited number of
enforcement actions from 2003 through 2006. The number of consumer
complaints received by CGB totaled about 454,000 and increased by about
40 percent during this period. As of December 31, 2006, about 95
percent of these complaints were closed. In addition, the Enforcement
Bureau conducted about 46,000 investigations and closed about 39,000,
of which almost 3,400 resulted in an enforcement action and about
32,200 did not result in an enforcement action. About 7,200
investigations remained open. According to FCC, it has collected about
72 percent of the $73 million in monetary forfeitures and payments
associated with consent decrees issued from 2003 through 2006.
Complaints Received and Processed by FCC's CGB Have Increased:
For calendar years 2003 through 2006, the number of complaints received
by CGB totaled about 454,000 and grew, from almost 86,000 in 2003, to a
high of about 132,000 in 2005, as shown in figure 1. Also, as shown in
figure 1, the number of complaints processed during these years
increased, reaching a high of 116,000 in 2005.
Figure 1: Number of Complaints Received and Processed by the Consumer
and Governmental Affairs Bureau, Calendar Years 2003 through 2006:
[See PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Year: 2003;
Complaints processed: 66,511;
Complaints not processed: 19,313;
Total number of complaints: 85,824.
Year: 2004;
Complaints processed: 101,328;
Complaints not processed: 15,118;
Total number of complaints: 116,446.
Year: 2005;
Complaints processed: 116,005;
Complaints not processed: 16,044;
Total number of complaints: 132,049.
Year: 2006;
Complaints processed: 100,633;
Complaints not processed: 19,421;
Total number of complaints: 120,054.
Source: GAO analysis of CGB's database.
[End of figure]
In its written comments, FCC said that figure 1 only reflects the
status of complaints received by CGB during the year in which the
complaint was received and that the figure does not reflect complaints
that were closed in subsequent years. This figure is designed to show a
year-by-year analysis of the number of complaints received, processed,
and not processed by CGB in the same year and is not designed to show
the number of complaints that were received in one year and processed
in a subsequent year.
Furthermore, from 2003 through 2006, about 65 percent of the 454,000
complaints received by CGB were about alleged violations of the FCC's
TCPA rules, as well as billing and rates for wireline and wireless
services, as shown in figure 2. TCPA complaints, which include
allegations of failing to honor the do-not-call list request and
soliciting during prohibited hours, increased, from almost 25,000 in
2003, to a high of about 58,000 in 2005.[Footnote 16] In addition,
complaints about billing and rates for wireline and wireless services
increased, from almost 30,000 in 2003, to almost 36,000 in 2004;
complaints then decreased to about 21,000 in 2006. These complaints
included not receiving credits, refunds, or adjustments that were owed
to the subscriber; questions about local, state, or federal taxes
appearing on the complainant's bills; and premature termination of
calls. The overall trend for programming issues, such as indecency, has
been steadily upward. For example, this type of complaint increased,
from about 700 in 2003, to almost 9,000 in 2006.
Figure 2: Top 10 Complaints Received by the Consumer and Governmental
Affairs Bureau, Calendar Years 2003 through 2006:
[See PDF for image]
This figure is a multiple horizontal bar graph depicting the following
approximated data:
Subject matter: TCPA (general solicitations): Complaints regarding the
receipt of unsolicited calls or messages for the purpose of encouraging
the purchase, rental, or investment in property, goods, or services;
Number of complaints, 2003: approximately 25,000;
Number of complaints, 2004: approximately 40,000;
Number of complaints, 2005: approximately 58,000;
Number of complaints, 2006: approximately 55,000;
Total (2003-2006): 178,079.
Subject matter: Billing and rates: Complaints regarding a number of
issues, including airtime charges, roaming rates, credit, and refund
adjustments;
Number of complaints, 2003: approximately 29,000;
Number of complaints, 2004: approximately 35,000;
Number of complaints, 2005: approximately 32,000;
Number of complaints, 2006: approximately 22,000;
Total (2003-2006): 117,875.
Subject matter: Referral to government agencies/FCC offices/states:
Complaints beyond FCC’s jurisdiction, such as intrastate billing
charges and expanded local calling service;
Number of complaints, 2003: approximately 4,000;
Number of complaints, 2004: approximately 5,000;
Number of complaints, 2005: approximately 6,000;
Number of complaints, 2006: approximately 5,000;
Total (2003-2006): 20,757.
Subject matter: Service related issues: Complaints regarding the
quality of services provided by cable, satellite, wireless, and
wireline providers;
Number of complaints, 2003: approximately 3,000;
Number of complaints, 2004: approximately 4,000;
Number of complaints, 2005: approximately 7,000;
Number of complaints, 2006: approximately 5,000;
Total (2003-2006): 19,509.
Subject matter: Carrier marketing and advertising: Complaints regarding
advertising and marketing practices of carriers, including
misrepresentation;
Number of complaints, 2003: approximately 4,000;
Number of complaints, 2004: approximately 5,000;
Number of complaints, 2005: approximately 4,000;
Number of complaints, 2006: approximately 3,000;
Total (2003-2006): 17,568.
Subject matter: Programming issues: Complaints regarding programs, such
as those that allegedly contain indecent, obscene, or profane material;
Number of complaints, 2003: approximately 1,000;
Number of complaints, 2004: approximately 3,000;
Number of complaints, 2005: approximately 4,000;
Number of complaints, 2006: approximately 8,000;
Total (2003-2006): 16,076.
Subject matter: Number portability: Complaints regarding the porting of
telephone numbers from a wireline to a wireless carrier or the reverse;
Number of complaints, 2003: approximately 4,000;
Number of complaints, 2004: approximately 6,000;
Number of complaints, 2005: approximately 2,000;
Number of complaints, 2006: approximately 2,000;
Total (2003-2006): 13,824.
Subject matter: Slamming: Complaints regarding the switching of a
consumer’s telephone services from one telephone company, or from one
calling plan, to another;
Number of complaints, 2003: approximately 2,000;
Number of complaints, 2004: approximately 5,000;
Number of complaints, 2005: approximately 2,000;
Number of complaints, 2006: approximately 1,000;
Total (2003-2006): 10,374.
Subject matter: Cramming: Complaints regarding unauthorized,
misleading, or deceptive charges on a consumer’s telephone bill for
services and products;
Number of complaints, 2003: approximately 3,000;
Number of complaints, 2004: approximately 2,000;
Number of complaints, 2005: approximately 2,000;
Number of complaints, 2006: approximately 2,000;
Total (2003-2006): 8,915.
Subject matter: Operator Service Provider issues: Complaints about a
common carrier that provides services from public phones, including
payphones, and those in hotels or motels;
Number of complaints, 2003: approximately 2,000;
Number of complaints, 2004: approximately 1,000;
Number of complaints, 2005: approximately 1,500;
Number of complaints, 2006: approximately 1,000;
Total (2003-2006): 5,273.
Subject matter: All other complaints: Complaints such as those
regarding connection to cable service, closed captioning of video
programs, digital subscriber lines, and may also include consumer
inquiries;
Number of complaints, 2003: approximately 8,000;
Number of complaints, 2004: approximately 10,000;
Number of complaints, 2005: approximately 13,500;
Number of complaints, 2006: approximately 14,500.
Total (2003-2006): 46,123.
Source: GAO analysis of CGB's database.
[End of figure]
Our analysis of CGB's database shows that, as of December 31, 2006, CGB
had processed almost 95 percent of the 454,000 complaints it received
from 2003 through 2006. Of the 23,000 complaints that were not
processed, about 84 percent, or 19,400, were pending for less than 1
year, and about 16 percent, or almost 3,600, were pending for 1 to 4
years, as shown in figure 3. Most of the complaints that remained
pending were potential TCPA and billing violations.
Figure 3: Number of Years Consumer and Governmental Affairs Bureau
Complaints Were Pending, as of December 31, 2006:
[See PDF for image]
This figure is a vertical bar graph depicting the following data:
Number of years: less than 1;
Number of complaints: approximately 19,000.
Number of years: 1-2;
Number of complaints: approximately 3,800.
Number of years: 2-3;
Number of complaints: approximately 200.
Number of years: 3-4;
Number of complaints: nearly 0.
Source: GAO analysis of CGB's database.
[End of figure]
Enforcement Bureau Opened and Closed a Large Number of Investigations,
but Few Enforcement Actions Were Taken:
Based on our analysis of FCC's Enforcement Bureau's databases for
calendar years 2003 through 2006, the Enforcement Bureau opened a total
of about 46,000 investigations that resulted from complaints it
received directly, audits and inspections, self-initiated inquiries,
and complaints it selected from CGB's database; the bureau closed about
39,000 of these investigations.[Footnote 17] As shown in figure 4, the
number of investigations the Enforcement Bureau opened between 2003 and
2006 increased, from about 8,600 in 2003, to almost 19,600 in 2006, or
about 127 percent. Similarly, the number of investigations closed by
the Enforcement Bureau in the same year they were opened also
increased, from about 7,400 in 2003, to almost 13,800 in 2006, or about
85 percent. However, the number of investigations pending in the same
year they were opened almost quadrupled--increasing from almost 1,200
in 2003, to about 5,800 in 2006. In addition, while the number of
investigations opened and closed increased in 2005 and 2006, the
percentage of investigations closed in these years is starting to trend
downward to about 78 and 70 percent, respectively, compared with about
85 percent in 2003 and 2004.
Figure 4: Number of Investigations Opened, Closed, and Pending by the
Enforcement Bureau, Calendar Years 2003 through 2006:
[See PDF for image]
This figure is a stacked vertical bar graph depicting the following
data:
Year: 2003;
Closed investigations: 7,447;
Pending investigations: 1,174;
Total number of investigations: 8,621.
Year: 2004;
Closed investigations: 7,052;
Pending investigations: 1,236;
Total number of investigations: 8,288.
Year: 2005;
Closed investigations: 7,654;
Pending investigations: 2,111;
Total number of investigations: 9,765.
Year: 2006;
Closed investigations: 13,764;
Pending investigations: 5,829;
Total number of investigations: 19,593.
Source: GAO analysis of Enforcement Bureau's databases.
[End of figure]
Using the data that was available in the Enforcement Bureau's
databases, we determined that about 9 percent, or almost 3,400 of the
approximately 39,000 investigations, were closed with an enforcement
action, and about 83 percent, or about 32,200 of the investigations,
were listed as closed with no enforcement action, as shown in figure 5.
We asked Enforcement Bureau officials to provide information on why
investigations were closed with no enforcement action. They explained
that investigations are generally closed for a number of reasons,
including insufficient information or because no violation was found.
Enforcement Bureau officials also stated that a time-consuming, manual
review of the paper case files was necessary to provide specific
information on its enforcement activities. We also were not able to
determine whether enforcement actions were taken or not taken for the
remaining 8 percent, or about 3,200 closed investigations, because the
Enforcement Bureau's databases did not contain sufficient information
on the disposition of the investigations.
Figure 5: Disposition of Enforcement Bureau's 39,000 Closed
Investigations, Calendar Years 2003 through 2006:
[See PDF for image]
This figure is a pie-chart, depicting the following data:
Investigation closed with no enforcement action taken; unable to
determine reason why from databases: 83%;
Investigation closed; action taken: 9%;
Investigation closed; unable to determine if enforcement action was
taken: 8%.
Source: GAO analysis of Enforcement Bureau's databases.
Note: The information in this figure was derived entirely from our
analysis of FCC's Enforcement Bureau's databases. This figure does not
include 283 proceedings closed by the Market Disputes Resolution
Division. Market Disputes Resolution Division cases result in FCC's
issuance of an order to resolve a dispute between two companies, rather
than a specific enforcement action taken by FCC against a subject.
[End of figure]
Enforcement actions can help correct identified compliance problems and
deter future noncompliance. As shown in table 2, the majority of the
investigations conducted from 2003 through 2006, which totaled about
20,000, were potential violations regarding antenna lighting and
structure requirements,[Footnote 18] junk faxes, domestic interference,
and indecency. FCC took enforcement actions in about 1,300 of these
investigations; admonishments, warnings, citations, and notices of
violation were the primary actions taken. FCC rarely relied on more
serious enforcement actions, such as issuing an order to cease and
desist. According to FCC, it takes several factors into account, such
as the nature and extent of the violation and whether the violator had
any history of prior offenses, before determining the type of
enforcement action.
Table 2: Summary of Enforcement Bureau's Approximately 39,000 Closed
Investigations, Calendar Years 2003 through 2006, Types of enforcement
actions taken[A]:
Type and number of investigations: Antenna lighting and structure
requirements (9,241);
Admonishment and warning: 320;
Citation: [Empty];
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 49;
Notice of violation: 244;
Closed; no action taken: 8,628;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: Junk fax (4,135);
Admonishment and warning: [Empty];
Citation: 192;
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 1;
Notice of violation: [Empty];
Closed; no action taken: 3,942;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: Domestic interference (3,539);
Admonishment and warning: 221;
Citation: 30;
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 54;
Notice of violation: 114;
Closed; no action taken: 3,120;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: Indecency (3,075);
Admonishment and warning: [Empty];
Citation: [Empty];
Consent decree: 85;
Debarment: [Empty];
Monetary forfeiture[B]: 11;
Notice of violation: [Empty];
Closed; no action taken: 2,880;
Unable to determine if any action was taken: 99.
Type and number of investigations: Customer Proprietary Network
Information (CPNI); certification (2,315);
Admonishment and warning: [Empty];
Citation: [Empty];
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: [Empty];
Notice of violation: [Empty];
Closed; no action taken: 2,315;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: Audits of certification-based
facilities (1,965);
Admonishment and warning: 189;
Citation: [Empty];
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 72;
Notice of violation: 92;
Closed; no action taken: 1,612;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: Emergency Alert System requirements
(1,533);
Admonishment and warning: 230;
Citation: [Empty];
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 53;
Notice of violation: 69;
Closed; no action taken: 1,181;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: Due diligence (1,082)[C];
Admonishment and warning: [Empty];
Citation: [Empty];
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: [Empty];
Notice of violation: [Empty];
Closed; no action taken: 365;
Unable to determine if any action was taken: 717.
Type and number of investigations: Other general enforcement
(1,079)[D];
Admonishment and warning: 34;
Citation: 3;
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 5;
Notice of violation: 6;
Closed; no action taken: 1,031;
Unable to determine if any action was taken: [Empty].
Type and number of investigations:
Admonishment and warning: 98;
Citation: 7;
Consent decree: [Empty];
Debarment: [Empty];
Monetary forfeiture[B]: 6;
Notice of violation: 142;
Closed; no action taken: 769;
Unable to determine if any action was taken: [Empty].
Type and number of investigations: All other investigations[E] (9,800);
Admonishment and warning: 698;
Citation: 124;
Consent decree: 50;
Debarment: 10;
Monetary forfeiture[B]: 88;
Notice of violation: 77;
Closed; no action taken: 6,394;
Unable to determine if any action was taken: 2,348.
Type and number of investigations: Total (38,786);
Admonishment and warning: 1,790;
Citation: 356;
Consent decree: 135;
Debarment: 10;
Monetary forfeiture[B]: 339;
Notice of violation: 744;
Closed; no action taken: 32,237[F];
Unable to determine if any action was taken: 3,164.
Source: GAO analysis of Enforcement Bureau's databases.
Note: The information in this table was derived entirely from our
analysis of FCC's Enforcement Bureau's databases.
[A] In addition to the enforcement actions listed in this table, the
Enforcement Bureau took four civil/criminal actions and seven equipment
seizures.
[B] Monetary forfeiture also includes notice of apparent liability
actions.
[C] According to an Enforcement Bureau official, due diligence, though
included in its databases, is not an investigation. Due diligence
refers to a request made to the Enforcement Bureau for information
concerning matters pending before the Bureau that might adversely
impact a proposed transaction with a station or company.
[D] FCC did not provide us with a definition for investigations it
referred to as other general enforcement.
[E] All other investigations includes, for example, Freedom of
Information requests, Universal Service Fund, unlicensed and
unauthorized operations, sponsorship identification, and unauthorized
equipment enforcement.
[F] This figure does not include 283 proceedings closed by the Market
Disputes Resolution Division.
[End of table]
In its written comments FCC said that figure 5 and table 2 in our
report understate or inaccurately state information about its
enforcement record or systems. As such, FCC conducted its own analyses
and provided us with the results of these analyses. However, while FCC
did not provide its methodology, its overall approach differs
significantly from the approach we used. Based on discussions with FCC
officials, we analyzed the variables from its databases that contained
information on enforcement actions and that could be searched for codes
indicating particular types of actions, such as "citation" or "monetary
forfeiture." We worked extensively with these officials to ensure that
we searched for all of the appropriate codes for enforcement actions.
However, in its comment letter, FCC acknowledged that it had to review
about 46,000 paper case files and use its databases to determine the
reasons why investigations were closed with no enforcement action. FCC
also acknowledged that it conducted a manual review of a variable in
its database that we could not use because of reliability concerns. As
noted in our report, the data that we used for our analyses are derived
directly from FCC's databases. We did not review the 46,000 paper case
files that FCC maintains. Our focus was on the database systems for
FCC's enforcement program. We continue to believe that FCC should have
data management systems that will allow it to generate this type of
information automatically, reliably, and regularly.
According to FCC, it assessed fines and negotiated payments through
consent decrees, which totaled about $73 million from 2003 through
2006, and has collected about $53 million, or 72 percent. However, as
shown in figure 6, the amount of the fines and payments negotiated
through consent decrees decreased, from about $25 million in 2003 and
$26 million in 2004, to almost $11 million in 2005 and $12 million in
2006--a decrease of more than 50 percent. According to an Enforcement
Bureau senior official, the phasing out of section 271 complaints may
have contributed to this decrease.[Footnote 19] FCC staff also stated
that the amount of fines and negotiated payments through consent
decrees totaled about $43 million in 2007.
Figure 6: Amount of Monetary Forfeitures Assessed and Payments
Negotiated through Consent Decrees, Calendar Years 2003 through 2006
(Dollars in millions):
[See PDF for image]
This figure is a vertical bar graph depicting the following data:
Year: 2003;
Amount of Forfeitures and Payments: approximately $25,000.
Year: 2004;
Amount of Forfeitures and Payments: approximately $26,000.
Year: 2005;
Amount of Forfeitures and Payments: approximately $10,000.
Year: 2006;
Amount of Forfeitures and Payments: approximately $11,000.
Source: FCC.
[End of figure]
At the end of December 2006, the Enforcement Bureau had almost 7,200
investigations that were pending resolution, as shown in figure 7.
About 81 percent, or about 5,800, were pending for less than 1 year,
and 19 percent, or almost 1,400, were pending from about 1 to 4 years.
About 46 percent of the pending investigations were related to
potential indecency violations, and about 800 of them remained open for
more than 1 year. According to FCC, litigation has delayed resolution
of many indecency investigations.[Footnote 20]
Figure 7: Number of Years Enforcement Bureau Investigations Were
Pending, as of December 31, 2006:
[See PDF for image]
This figure is a vertical bar graph depicting the following data:
Number of years: less than 1;
Number of investigations pending: approximately 5,800.
Number of years: 1-2;
Number of investigations pending: approximately 900.
Number of years: 2-3;
Number of investigations pending: approximately 400.
Number of years: 3-4;
Number of investigations pending: nearly 0.
Source: GAO analysis of FCC data.
[End of figure]
It is difficult to fully determine the reasons why the trends we
identified occurred. FCC officials were not able to explain or provide
documentation on why the number of complaints, investigations, and
enforcement actions fluctuated from 2003 through 2006. While we were
able to use FCC enforcement data to identify some overall trends, FCC
had not systematically identified trends related to enforcement issues
associated with its overall mission, and we were not able to use the
data to determine why the trends occurred. Apart from providing
requested information for our analysis of FCC's enforcement data, the
Enforcement Bureau has taken few steps to analyze the Commission's
existing data to determine the reasons for the fluctuations in
complaints received, investigations conducted, and enforcement actions
taken. FCC has not systematically analyzed its existing enforcement
data to identify factors that might account for the year-to-year
fluctuations we found in the data. While FCC has an array of
enforcement actions that it may take, performing this type of analysis
may help in assessing the effectiveness of the enforcement program and
the utility of FCC's enforcement actions.
FCC's Enforcement Bureau Assesses Some Program Outputs, but Lacks Key
Management Tools to Measure Outcomes and Manage Its Program:
FCC's Enforcement Bureau periodically reviews some of its enforcement
program outputs to determine how well it is doing in certain areas but
does not use its data to evaluate the outcomes of its enforcement
efforts. The Enforcement Bureau's ability to assess the impact of its
enforcement program is limited because it does not have a well-defined
enforcement strategy, specific enforcement goals, or performance
measures. We have previously reported that a key element in an
organization's efforts to manage for results is its ability to select
meaningful performance goals and measures. Without these key management
tools, FCC faces challenges in managing its enforcement program and in
fully assuring Congress and other stakeholders that it is meeting its
enforcement mission and related objectives of the Act, which include
protecting the consumer, ensuring public safety, and encouraging
competition.
FCC's Enforcement Bureau Measures Outputs Rather Than Outcomes:
FCC has focused on measuring the outputs of its enforcement program and
not on measuring outcomes or the net effect of its program. For
example, Enforcement Bureau officials told us that two measures they
use to determine how well they are doing are whether they have met the
statute of limitations for monetary forfeitures and how long it takes
to close a case. However, Enforcement Bureau officials told us that to
prepare written reports on these two output measures, data must be
compiled from several different databases, as well as from a manual
search of thousands of paper case files. In addition, each of the
Enforcement Bureau's five divisions described a different method for
measuring its performance. For example, three divisions (Spectrum
Enforcement, Investigations and Hearings, and the Field Offices) told
us they know their actions are effective because they handle 100
percent of the complaints they receive. The Telecommunications Consumer
Division generally assesses its effectiveness on a case-by-case basis
through staff dialogue, and the Market Disputes Resolution Division
measures its effectiveness by the percentage of proceedings, that meet
statutory deadlines, and the amount of time taken to close cases.
While measures of outputs are useful, measures of outcomes are also
important because they can provide FCC with broader information on
program results, such as the extent to which its current enforcement
efforts are contributing to higher compliance rates or fewer repeat
violations or whether other types of enforcement action may be needed
to deter noncompliance. Currently, FCC's Enforcement Bureau conducts
limited analyses of its enforcement data. For example, the Enforcement
Bureau monitors the amount of time it takes to close an investigation,
but it does not measure the effect of one of its key enforcement tools-
-monetary forfeitures--on companies' compliance with telecommunications
laws and Commission rules. Without this information, it is difficult
for FCC to make sound decisions about how this program might be made
more effective. In addition, FCC created the Enforcement Bureau in 1999
because it wanted to enhance the Commission's ability to serve the
public by improving the effectiveness of the enforcement program.
However, FCC has not analyzed the impact of this new organizational
structure to determine if it is more effective and efficient than the
previous decentralized structure, under which several bureaus were
responsible for enforcing telecommunications laws and Commission rules.
According to Enforcement Bureau officials, they believe that
centralizing enforcement efforts has been effective because it has
enabled the bureau to establish standard procedures across all issue
areas, resulting in more consistent and effective enforcement, and has
also brought greater visibility and importance to the enforcement
function. As a measure of the program's effectiveness, Enforcement
Bureau officials pointed out that the efforts of the bureau have
garnered headlines in the mainstream press and have been cited by a
wide range of citizens and industry participants.
We asked several stakeholders, including telecommunications company
executives and telecommunications experts, for their views on the
impact of FCC's enforcement efforts.[Footnote 21] Eleven of the fifteen
executives we interviewed stated that they believe FCC's enforcement
program is having an impact on the telecommunications industry, and
four of the five experts we interviewed said they thought FCC was
having a positive effect on the telecommunications industry. For
example, one expert stated that FCC is doing a good job, particularly
in protecting consumers; another said that the Enforcement Bureau has
had an impact on reducing intentional interference and ensuring public
safety; and a third said that FCC's Enforcement Bureau has been
effective in working with the states to address slamming and cramming
issues. However, all five experts and 9 of the 15 executives we
interviewed were also critical of FCC's enforcement efforts. The 9
executives said that FCC's enforcement decisions are not always
equitable, and 6 of the 9 stated that FCC's enforcement actions were
not always transparent. For example, 1 executive said that the use of
consent decrees lacked both transparency and equity because there was
no indication as to how the final result was determined and parties to
the consent decree did not know how prior consent decrees involving the
same alleged violation were handled. Another executive told us that the
focus of FCC's investigations appeared to be arbitrary and based on the
issues of the moment, resulting in inequitable enforcement actions. One
expert stated that whenever FCC makes an enforcement decision, there is
always the possibility that negotiations behind the scenes are not
subject to public review.
FCC's Enforcement Bureau Has Not Fully Defined Its Strategy and Has No
Specific Goals or Performance Measures:
FCC's Enforcement Bureau has not fully defined its strategy for
carrying out its enforcement of consumer protection, public safety, and
competition laws and rules. FCC's Web site states that "the Enforcement
Bureau is the primary organizational unit within the Federal
Communications Commission that is responsible for enforcement of
provisions of the Communications Act, the Commission's rules,
Commission orders and terms and conditions of station authorizations."
However, FCC's Strategic Plan for 2006 through 2011, Fiscal Year 2006
Performance and Accountability Report, and Fiscal Year 2006
Congressional Justification of Estimates do not identify specific
enforcement goals or performance measures linked to those goals that
would allow a complete assessment of the results of FCC's enforcement
program.[Footnote 22] In addition, while the Enforcement Bureau has an
enforcement manual that provides general guidance on conducting
investigations, the various types of enforcement actions it can take,
and how each should be used, the manual does not specify enforcement
goals or priorities relating to consumer protection, public safety, and
competition.
Federal agencies are required to develop strategic plans with long-
term, outcome-oriented goals and objectives, annual goals linked to
achieving the long-term goals, and annual reports on the results
achieved.[Footnote 23] An analysis of FCC's Strategic Plan for 2006
through 2011, Fiscal Year 2006 Performance and Accountability Report,
and Fiscal Year 2006 Congressional Justification of Estimates shows
that, although there are strategic goals for FCC, there are no
strategic or performance goals pertaining to the Enforcement Bureau.
For example, in its Strategic Plan for 2006 through 2011, FCC lists
goals in six categories: broadband, competition, spectrum, media,
public safety and homeland security, and FCC modernization. Each of
these strategic goals is supported by a number of objectives showing
how FCC will meet these goals. Several of the objectives include the
term "enforcement," such as the objective that states, "the Commission
shall vigorously enforce its spectrum regulations and policies," but
there are no specific or measurable enforcement actions indicated. The
Fiscal Year 2006 Performance and Accountability Report also illustrates
the lack of specific performance measures relating to enforcement. In
the section on program performance, there are performance goals for
each of the six strategic goals. While some of these performance goals
do include the term "enforcement," such as in the statement "enforce
the Commission's rules for the benefit of consumers," no specific,
measurable actions are listed. Additionally, in the Fiscal Year 2006
Congressional Justification of Estimates, FCC uses a performance
measure scorecard to identify its activities of the past year in
support of each of its six strategic goals. One of the activities in
support of homeland security is to "enforce technical regulations and
investigate harmful interference complaints affecting public safety
communications systems and infrastructure." FCC rated itself as having
met this goal, although there are no specific actions listed and no
indication of how much activity is required for FCC to meet the goal.
Enforcement Bureau officials told us that the bureau has not set
specific goals and performance measures because its priorities are
constantly changing. Officials explained that the Enforcement Bureau is
responsive to a number of stakeholders--Congress, Commissioners, the
public--and the priorities of those stakeholders change. In addition,
the Enforcement Bureau is responsible for enforcing a wide range of
rules and issues, and current enforcement priorities may not be future
enforcement priorities. For example, according to an FCC official,
issues regarding the transition to digital television have become a
high priority, but after February 2009, when the transition takes
place, these issues will no longer be as significant. However, we found
that the Enforcement Bureau had specific enforcement goals and
performance measures in the past. For example, in its fiscal year 2004
annual performance plan, FCC specified the following performance goals
relating to enforcement and stated that it met these goals:
* achieve a 10 percent reduction in the number of long-distance
slamming complaints in 2000, a 20 percent reduction in 2001, and a 40
percent reduction in 2002;
* achieve 65 percent compliance with new disability rules in 2000, 80
percent compliance in 2001, and 85 percent compliance in 2002; and:
* achieve 85 percent compliance with antenna lighting rules in 2000, 90
percent compliance in 2001, and 92 percent compliance in 2002.
The Federal Trade Commission (FTC), which shares responsibility with
FCC for consumer protection against violations of the do-not-call list
request and telemarketing fraud, has developed goals and performance
measures to assess the results of its enforcement program. For example,
one of FTC's strategic goals is to maintain competition by identifying
and taking enforcement action against anticompetitive mergers and
practices that cause the greatest injury to consumers. In support of
this goal, they have established performance measures, one of which is
to achieve a positive result in at least 80 percent of the cases in
which the FTC takes enforcement action each year. According to FTC
officials, setting specific goals and performance measures allows them
to target their enforcement activities and more efficiently use their
limited resources.
Goals and Performance Measures Are Key Elements of Effective
Management:
We have previously reported that a key element in an organization's
efforts to manage for results is its ability to set meaningful
performance goals and measures and agencies should create a set of
performance goals that address key aspects of program performance. We
and other federal agencies have also maintained that adequate and
reliable performance measures are a necessary component of effective
management. [Footnote 24] We have also found that performance measures
should provide agency managers with timely, action-oriented information
in a format conducive to helping them make decisions that improve
program performance, including decisions to adjust policies and
priorities.[Footnote 25] However, FCC does not appear to be using these
key management practices to manage the work of its Enforcement Bureau.
In 2006, we recommended that FCC develop goals and performance measures
for its program pertaining to the enforcement of junk fax rules. FCC
has told us it is in the process of implementing some of those
recommendations. For example, in 2006, we found that FCC's Enforcement
Bureau did not have goals or performance measures for junk fax
monitoring and was not performing any analysis of complaint and
enforcement data, making it impossible to explore the effectiveness of
their current enforcement measures.[Footnote 26] FCC acknowledged the
need for such measures and, in July 2007, told us it had begun drafting
such goals and performance measures. The Commission has also recognized
the need for more data to measure performance, as indicated by a
directive from FCC's OMD issued in May 2007. This directive outlines
FCC's plans to begin collecting and analyzing data to measure the
performance of Commission programs that involve the processing of
applications or other filings from the public or other private
entities. An Enforcement Bureau official told us that the bureau will
respond to this directive by gathering data that could be used to help
FCC better manage its enforcement program. Although these efforts, when
completed, will begin to address the Enforcement Bureau's lack of
specific program goals and performance measures, the Enforcement Bureau
will not have goals or performance measures for several of its
divisions, such as the Investigations and Hearings Division or the
Market Disputes Resolution Division. Without goals, a well-defined
enforcement strategy, and performance measures linked to those goals,
the Commission lacks important tools for assessing and reporting on the
progress of its enforcement program and determining whether changes
should be made.
FCC disagreed with our finding that it has no specific enforcement
goals or performance measures. In its comments, FCC stated that its
performance goals for disposing of complaints are 1 day for public
safety interference complaints, 1 month for nonemergency interference
complaints, and 9 months for indecency complaints. We view FCC's
efforts to collect, track, and report data for such goals as first
steps toward performance management, and we encourage FCC to ensure
that it consistently includes this information in its future
Performance and Accountability Reports. However, as we state in our
report, such goals are measures of outputs and are useful as indicators
of program activities, but measures of outcomes, such as the extent to
which FCC's current enforcement efforts are contributing to higher
compliance rates or fewer repeat violations may be more important
because they can provide FCC with broader information on program
results.
An Inadequate Data Management System Challenges the Enforcement
Bureau's Ability to Carry Out Its Responsibilities:
Limitations with FCC's current approach for collecting and analyzing
enforcement data challenge the ability of the Enforcement Bureau to
carry out its enforcement responsibilities, making it difficult for the
bureau and others to determine the enforcement program's effectiveness
or for the bureau to accurately track and monitor data on complaints
received, investigations conducted, and enforcement actions taken.
Currently, the Enforcement Bureau uses several separate databases and
manually searches paper case files to track and monitor its enforcement
activities. Consequently, we could not use the Enforcement Bureau's
databases to obtain bureau-level information on the percentage of
monetary forfeitures assessed within FCC's statute of limitations, the
speed with which FCC disposed of complaints, the reasons for closing
investigations with no enforcement action, or the amounts of the fines
FCC assessed. Our past work has shown that when data management systems
are not integrated and compatible, excessive use of resources and
inconsistent analyses of program results can occur.
The Enforcement Bureau has five databases, one for each of its five
divisions. However, these databases are not standardized and do not
track the same information in the same manner. FCC officials explained
that when the Enforcement Bureau was created in 1999, it inherited
these databases from the various bureaus and, partly because of budget
constraints, cobbled them together rather than create a single,
standardized, automated data management system. These officials
acknowledged that the databases have limitations and were created only
to manage staff workload, not to track the history of cases or measure
performance.[Footnote 27]
While the Enforcement Bureau's databases do contain some information,
our analysis of their files indicates that this information is not
sufficient to measure certain important aspects of FCC's enforcement
program. For example, when we tried to determine whether FCC met the
statute of limitations for assessing monetary forfeitures, we could not
determine how many cases the Enforcement Bureau resolved within the
statutory deadline because the databases did not contain sufficient
information. Specifically, the Investigations and Hearings Division's
database was missing 84 percent, the Telecommunications Consumers
Division's database was missing 99 percent, and the Spectrum
Enforcement Division's database was missing 99 percent of the
information needed to determine whether FCC met the statute of
limitations for assessing monetary forfeitures. Of the remaining two
databases, one (for Field Offices) would allow the statutory deadline
to be determined for investigations that were closed with an
enforcement action, but not for investigations that were closed with no
enforcement action because the database does not include a field for
the date of the alleged violation. The other database is managed by the
Market Disputes Resolution Division; according to Enforcement Bureau
officials, the majority of the division's investigations do not have a
statute of limitations involving forfeitures, and the database does not
have a field for this information.[Footnote 28]
We were also unable to determine how long it took the Enforcement
Bureau to open and close investigations for three of its five divisions
because of how the required information is entered into the databases.
Enforcement Bureau personnel did not always enter the dates into the
database and, when a date was entered, it was not always clear what the
date represented. For example, it was unclear whether the date entered
was the date of the initial or the final enforcement action. More
specifically, according to one Investigations and Hearings Division
official, it would be difficult to calculate the speed of disposal
times for investigations in its database because entering the date when
an investigation was closed was not always a priority for the division
and its database does not track all milestones in an investigation.
While the Spectrum Enforcement Division's database has fields for
opening and closing dates, we were not able to calculate the speed of
disposal because we could not always determine what the closing date
represented. According to Enforcement Bureau officials, the
Telecommunications Consumers Division's database cannot determine the
speed of disposal for investigations because some investigations
tracked in the database have been closed at one point with an
enforcement action but have subsequently been reopened to consider the
next stage of enforcement. This reopening affects both the number of
enforcement actions tracked in the database and the speed of
disposition. In addition, cases that were initially closed but then
reopened, and left pending for some time after being reopened, would be
tracked back to the initial date and would appear to have taken a long
time to close. As a result, data for such cases would skew calculations
of the average speed of disposition for all of the Telecommunications
Consumers Division's enforcement actions.
We were also unable to use the Enforcement Bureau divisions' databases
to determine the amounts of the fines the bureau had assessed, the
amount collected, or the status of the uncollected amount. We could not
determine this information because several of the database fields
relating to fines either were missing information or did not contain
sufficient information to allow for data analysis.[Footnote 29] For
example, while the Investigations and Hearings Division's database
tracks the amounts of the fines assessed, the information is not
consistently entered into the database and there are no distinct fields
for the amounts initially assessed, reduced, collected, or outstanding.
In addition, we found that the database used by the Telecommunications
Consumers Division had a table for tracking fines, but data were not
entered into the table consistently. FCC officials told us that they
could generate information on fines and other aspects of the agency's
enforcement program by manually searching thousands of paper files.
Finally, during the course of our review, we could not use FCC's
databases to determine how many of the 32,200 investigations that were
closed with no enforcement action from 2003 through 2006 were closed
because no violation was found, because of insufficient information,
because the statute of limitations had expired, or because of other
reasons. We were not able to make this determination because FCC did
not collect the information systematically, which hampered our ability
to analyze its enforcement efforts. Specifically, we found that the
Investigations and Hearings and the Telecommunications Consumers
Divisions' databases did not clearly indicate whether a case was closed
because no violation was found or because of other reasons. The
Spectrum Enforcement Division entered some information specific to why
investigations were closed with no enforcement action in text fields,
but the information was not entered in a way that would allow for
quantitative analysis. While the Field Office database allows for some
determination of when investigations were closed with no enforcement
action, we had to follow up with Field Office officials to obtain the
specific reasons. In addition, we could not use the database to
determine why the majority of their investigations were closed with no
enforcement action. According to Field Office officials, the majority
of their investigations do not result in an enforcement action because,
generally, no Commission rules were violated. For FCC to analyze the 83
percent of investigations that did not result in an enforcement action,
it would have to (1) access files for all of those cases, (2) ensure
that the files contained sufficient information for a reviewer to
reconstruct the reasons for no action, and (3) establish and implement
procedures that would ensure consistency and accuracy in the review.
FCC could also review a statistical sample of the cases in which no
action was taken, rather than the entire universe of such cases. The
review procedures should include clear guidance for reviewers to
categorize the reasons for no action and provide a means for checking
the accuracy and consistency of the reviewers.
Conclusions:
The extent to which FCC is effectively enforcing the Communications Act
of 1934, as amended, and Commission rules and orders is difficult to
assess because it lacks a robust data management system, as well as
performance goals and measures. For example, a more robust data
management system for monitoring complaints, investigations, and
enforcement actions is critical for the agency to better understand the
outcome and net results of its enforcement efforts. In past reports, we
have discussed the importance of maintaining timely and accurate data
to help monitor and improve the effectiveness of government programs.
We have found that, in order to make informed decisions and ensure
accountability, agencies need data management systems that can generate
timely, accurate, and useful information. Lacking such critical
information, government leaders are not able to invest resources where
they are needed, reduce costs, or fully oversee programs; they are also
unable to hold agency managers accountable for the outcomes of
government programs. We also found that agencies that do not have
integrated data management systems are more likely to devote more time
and resources to collecting information than those with integrated
systems and that opportunities for errors increase when agency systems
are not compatible.
Moreover, beyond our analysis of FCC's enforcement data, there have
been limited efforts to analyze the Commission's existing data to
identify trends and determine the reasons for the year-to-year
fluctuations in the number of complaints received, investigations
conducted, and enforcement actions taken. FCC has not systematically
analyzed its existing data to identify factors that might account for
these fluctuations and to assess their implications for the enforcement
program. As demonstrated by our analysis of FCC's enforcement data, the
Commission does have some information available, despite data
limitations, to analyze enforcement outputs and outcomes in a manner
that could provide more reliable, useful, and timely information for
managing its day-to-day operations and to make more informed decisions
about its enforcement efforts. In addition, improvements in existing
data management could make this type of analysis more useful and could
enhance FCC's ability to provide Congress and other stakeholders with
accurate and timely information on its enforcement program. This
information could also help the Enforcement Bureau determine whether
different policy options might be more effective in implementing the
enforcement program.
The extent to which the Enforcement Bureau is achieving its mission is
difficult to determine because the bureau does not use several
important performance management tools. FCC's Enforcement Bureau has
not set specific enforcement goals, developed a well-defined strategy
for achieving those goals, or established performance measures linked
to goals. Performance measures of program results are important for
several reasons. First, they can help hold agencies accountable for the
performance of their programs. Among other things, measures of
enforcement results may help FCC allocate limited resources where they
are most needed and determine if rules and procedures should be changed
to deter potential violators. Second, Congress needs information on
program results to support its oversight of agencies and their budgets.
Third, stakeholders can use this information to accurately judge
program effectiveness.
Recommendations for Executive Action:
To develop a more effective approach to enforcing telecommunications
laws and Commission rules, we recommend that the Chairman of the
Federal Communications Commission:
* improve how FCC collects and analyzes data on complaints received,
investigations conducted, and enforcement actions taken to help it
better manage and understand the outcomes and net results of
enforcement efforts and to provide Congress and stakeholders with
timely and accurate information that can be used to hold FCC's
enforcement program accountable for accomplishing its mission under the
Act; and:
* develop and implement additional performance management practices,
such as outcome measures, to assess the performance and improve the
accountability of FCC's enforcement program.
Agency Comments and Our Evaluation:
We provided a draft of our report to FCC for review and comment. FCC
commented that it has already implemented measures that address both of
our recommendations, but it provided no supporting documentation. In
addition, FCC disagreed with our methodology and several of our
findings. FCC's detailed comments appear in appendix II. FCC also
provided over 100 pages of attachments in its comments. Because these
attachments cover time periods that are after the scope of our audit
and are voluminous, we have decided to characterize the attachments
rather than include them in their entirety.[Footnote 30] FCC also
provided technical and legal clarifications, which we incorporated as
appropriate. In appendix I, we also clarified our methodology for
analyzing FCC's databases. These technical and legal changes did not
affect our findings, conclusions, or recommendations.
In FCC's view, it has already implemented measures that address both of
our recommendations. Concerning our first recommendation, FCC said that
during the period of our audit (2003 through 2006), the Commission was
already aware of the challenges posed by its limited information
systems and database management resources and already had plans in
place to improve its enforcement data collection methods and process.
By July 2007, FCC said, the Commission had secured congressional
approval to make significant modifications to the databases and systems
used to support its enforcement activities. Concerning our second
recommendation, FCC noted that it has implemented standardized
enforcement performance goals to better manage the enforcement process
and to automate portions of this process. Moreover, according to FCC,
goals and measures for managing the enforcement process have been
incorporated for the first time into the performance plans of the
senior executives responsible for oversight of the enforcement program
and that information about these efforts is included in the
Commission's Fiscal Year 2007 Performance and Accountability Report.
Finally, FCC said that we based our conclusions and recommendations on
significantly outdated information and that our report contains several
errors. As a result of these errors, FCC said, our report provides a
misleading description of FCC's current enforcement processes,
understates or inaccurately states information about FCC's enforcement
record or systems, and provides an incomplete and misleading picture of
FCC's legal enforcement environment.
We are pleased that FCC may be taking some steps toward implementing
our recommendations, but we disagree with FCC that it has already fully
implemented them; we also disagree with FCC's criticisms of our
methodology and findings. We believe that our report provides an
accurate and sufficient overview of FCC's processes for handling
complaints, conducting investigations, and taking enforcement actions
and the results of FCC's efforts to enforce telecommunications laws and
the Commission's rules from 2003 through 2006. We also exercised the
due diligence in writing our report to ensure we explained that the
results of our analysis are based entirely on FCC's databases. In our
view, FCC's concerns about the accuracy of our findings stem from (1)
the challenges FCC faces in not having a data management system that
will allow it to systematically collect and analyze information about
complaints, investigations, and enforcement actions and (2) the
Commission's use of an approach that differs significantly from ours.
We discuss the challenges posed by FCC's data management system in our
report and point out that without improvements such as we recommend,
FCC cannot readily analyze trends, determine program effectiveness,
allocate Commission resources, or accurately track and monitor key
aspects of all complaints received, investigations conducted, and
enforcement actions taken. In addition, the Commission's use of data
for 2007 and data from paper case files, both of which were outside the
scope of our analysis, necessarily led to findings that differed from
ours. These differences, however, do not affect the appropriateness of
our methodology or the accuracy of our findings.
In commenting that it has already implemented our first recommendation-
-to improve how it collects and analyzes data on complaints received,
investigations conducted, and enforcement actions taken--FCC stated
that its Managing Director wrote Congress on June 27, 2007, asking for
approval to upgrade its databases and that FCC expected the final
delivery of system enhancements this year. While we are pleased that
FCC has taken this step, on July 26, 2007, the Chief of FCC's
Enforcement Bureau stated that the funds would be used to enhance CGB's
database for processing junk fax and do-not-call list request
complaints and that FCC has no specific plans or time frames for
upgrading the Enforcement Bureau's databases. In its comments, FCC did
not provide any additional information that changes our understanding
of the Enforcement Bureau's plans to upgrade it databases systems.
Thus, it is not apparent to us how enhancements to CGB's database will
address the weaknesses with the Enforcement Bureau's databases.
Therefore, we do not believe that FCC has yet fully implemented our
first recommendation.
In commenting that it has already implemented our second
recommendation--that it develop and implement performance management
practices for the Enforcement Bureau, such as a well-defined
enforcement strategy that includes specific goals and performance
measures--FCC cited its implementation of standardized enforcement
performance goals, its incorporation of enforcement goals and measures
in the performance plans of its senior executives responsible for
enforcement oversight, and its inclusion of this information in its
Fiscal Year 2007 Performance and Accountability Report. The performance
goals that FCC cited for disposing of complaints are 1 day for public
safety interference complaints, 1 month for nonemergency interference
complaints, and 9 months for indecency complaints. We view FCC's
efforts to collect, track, and report data for such goals as first
steps towards performance management, and we encourage FCC to ensure
that it consistently includes this information in its future
Performance and Accountability Reports. However, as we state in our
report, such goals are measures of outputs and are useful as indicators
of program activities, but are not measures of outcomes, such as the
extent to which FCC's current enforcement efforts are contributing to
higher compliance rates or fewer repeat violations. These outcome
measures are necessary to determine a broader perspective on program
results. Thus, while FCC has begun to develop and implement performance
management practices, we believe that further efforts are needed for
FCC to fully implement our recommendation.
FCC disagreed with our methodology and our findings, conducted its own
analyses, and included the results of these analyses in attachments to
its comments. According to FCC, its results are more accurate than
ours. We disagree and believe that our results represent an accurate
analysis of the relevant information in FCC's databases. Whereas we
used data only from FCC's databases, FCC used information from both its
databases and its approximately 46,000 paper case files. In addition,
because FCC's databases are frequently updated and it analyzed data a
year after we received our data, we believe this could have contributed
to the differences in our results. As part of our routine
recommendation follow-up work, we will assess FCC's progress in 2007.
According to FCC, the data for 2003 through 2006 that we used are out
of date. However, these are the most recent data for complete years
that were available to us at the time of our review. In conducting our
audit work, we often select data for the last 3 or 4 years to analyze
because it allows us to ensure the consistency and integrity of the
data, identify trends, and understand information over time. We
initially designed our analysis to cover a longer time period and
requested data from FCC for 2000 through 2006, but FCC was not able to
provide us with CGB's data from 2000 through 2003 because data prior to
2003 had been purged from its files. To be consistent in our reporting,
we analyzed data from CGB and the Enforcement Bureau for the same time
period, 2003 through 2006.
FCC also stated that our report does not acknowledge or assess its new
process for handling consumer complaints. We disagree. Our description
of FCC's process for responding to consumer complaints is based on
information it provided to us during the course of our review. During
the course of our review, FCC stated that it planned to change its
process for responding to consumer complaints. However, FCC did not
provide any documentation explaining how or when. Thus, we were not
able to evaluate any changes that FCC may have made to it process for
responding to consumer complaints.
FCC also disagreed with our finding that 83 percent of its
investigations were closed with no enforcement actions and that there
were no justifications for these closures in its databases. In its
comments, FCC stated that its analysis of its databases and paper case
files showed that 85 percent of its investigations were closed with no
enforcement actions and 96 percent of these closures were due to
findings of compliance or insufficient information from the
complainant. To determine the reasons why investigations were closed,
we attempted to identify a reliable variable in FCC's enforcement
database that clearly categorized the justifications for closing an
investigation with no enforcement action. No such variable exists. As
an alternative, FCC referred us to open-ended text variables in the
course of our audit work. We reviewed these variables, and in June
2007, told FCC officials that we could not use these variables because
many of the database fields were frequently blank or, if completed,
contained varying amounts of text to justify the actions or lack
thereof. While such information may be useful to the FCC analysts
working on the investigations, they are not useful or usable for
management information purposes. In addition, as FCC acknowledged in
its comments, to determine the reasons why its investigations were
closed with no enforcement action, it had to use approximately 46,000
paper case files. As noted in our report, the data that we used for our
analysis are derived entirely from FCC's databases. We did not review
the 46,000 paper case files that FCC maintains. Our focus was on the
database systems for FCC's enforcement program. FCC also acknowledged
that it conducted a manual review of a variable that indicated
enforcement action codes we could not search with any reliability.
While our analyses are accurate based on the database variables we
analyzed, we acknowledge that they do not account for information that
FCC retained in paper case files and did not enter into its databases
or for information that was entered in data fields that we could not
search with our computer routines. Our understanding is that FCC
analysts reviewed the information from its databases and paper case
files and categorized the reasons for approximately 46,000
investigations after we conducted our initial analysis. We believe that
FCC should have data management systems that allow it to generate this
type of information automatically, reliably, and regularly. Therefore,
we stand by our recommendation that FCC needs to improve how it
collects and analyzes data on complaints received, investigations
conducted, and enforcement actions taken because we do not believe that
managing a program by reviewing 46,000 paper case files constitutes a
good management practice.
Finally, we continue to believe that the findings, conclusions, and
recommendations in our report are accurate and can improve how FCC
manages its enforcement program. We also believe that FCC will continue
to have difficulty providing Congress and other stakeholders with
accurate and timely information on its enforcement efforts if it does
not take additional steps to fully address our recommendations.
As agreed with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days from the date of this letter. At that time, we will send copies of
this report to the appropriate congressional committees and the
Chairman of the Federal Communications Commission. We will also make
copies available to others on request. In addition, the report will be
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staff have any questions, please contact me at (202) 512-
2834 or goldsteinm@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made major contributions to this
report are listed in appendix III.
Sincerely yours,
Signed by:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
[End of section]
Appendix I: Scope and Methodology:
To summarize the number and types of complaints received,
investigations conducted, and enforcement actions taken by the Federal
Communications Commission (FCC) during calendar years 2003 through
2006, we obtained six different databases from FCC in various formats.
FCC's Enforcement Bureau provided four Microsoft Access databases and
one fixed-width delimited text file, which had several text files
linked by a single unique identifier. FCC's Consumer and Governmental
Affairs Bureau (CGB) also provided a fixed-width delimited text file,
which was a single 'flat file' that contained information on all
complaints received from 2003 through 2006. The 'flat file' contained
all the information and there were no other data files associated with
it. When available, FCC also provided data dictionaries, user guides,
screen shots, and illustrations of how key tables were linked for each
database. Each of FCC's databases is independent (meaning that they are
not connected or related to one another) and, therefore, the specific
data elements contained in each one differed. Additionally, when
multiple databases contained the same data element, it was often
referred to or tracked differently.
We subsequently reviewed each database and file for consistency;
duplication; and missing identifiers, such as case number. We limited
our analysis to records that had an open date between calendar years
January 1, 2003 and December 31, 2006. We excluded all cases in each
database that were received before 2003 and after 2006. We then sorted
the data into closed and pending cases. Closed cases had a closing date
in the record and were closed as of December 31, 2006. If a situation
existed in which a case had multiple records with varying dates, we
always used the last date. We also excluded any cases where the closing
date was before the opening date. Pending cases are cases that either
did not have a closing date or the closing date was after December 31,
2006. We also reviewed the data dictionaries FCC provided to determine
which fields contained the data elements we planned to report on. We
ran frequency distributions using SAS software on all selected fields.
These distributions provide guidance as to whether the contents are
complete enough for use. This means that if a database has two similar
fields such as Date Received and Data Entry Date, we needed to know
which of these fields is used most frequently so that we could base our
analysis on fields that are actually used by FCC. For example, if the
Date Received field was populated only 40 percent of the time and the
Data Entry Date field was populated 99 percent of the time, we used the
Data Entry Date field. Based on this analysis, we developed a list of
fields we could use from each database. We compared this list to the
data elements we wanted to report on to determine the extent to which
we would be able to report data according to our initial plan. We found
that for three of the five Enforcement Bureau's databases that are
maintained by its Investigations and Hearings Division,
Telecommunications Consumers Division, and Field Offices, we could
report on the subject matter, the number of open and closed cases, and
the disposition of closed cases from 2003 through 2006. For one of the
remaining two databases, we were only able to report on the number of
open and closed cases from 2003 through 2006. The remaining database is
maintained by the Enforcement Bureau's Market Disputes Resolution
Division. This division does not conduct investigations; instead it
conducts proceedings which may result in FCC's issuance of an order to
resolve a dispute between two companies, rather than an enforcement
action. Thus, we are not including this database in our analysis.
We met with Enforcement Bureau officials to discuss the specific fields
that we were planning to use and the manner in which we were going to
use them. These officials agreed with the fields we had selected and
acknowledged the limitations we faced with its databases. We reached
agreement with Enforcement Bureau officials that for the Investigations
and Hearings Division, Telecommunications Consumers Division, and Field
Office databases we would report on the subject matter, the number of
opened and closed investigations, and the most recent action taken for
the closed investigations. Since the databases contained a large number
of subject matters and many options for disposition of closed cases, we
worked with Enforcement Bureau officials to combine the subject matters
and dispositions of cases for reporting purposes. For example, CGB's
database contained numerous subject matters for various types of
billing issues. Based on discussions with CGB officials, we combined
all subject matters related to billing into one subject matter called
"Billing."
Based on our interviews with FCC and examination of its data, we
determined that certain variables in the databases were sufficiently
reliable for the purposes of this engagement. These variables allowed
us to identify closed cases and determine whether enforcement actions
had been taken, but did not allow us to determine the reasons for which
actions were taken. To determine whether enforcement actions were
taken, we analyzed the variables from FCC's databases. FCC officials
told us that these databases contained information on enforcement
actions and could be searched for codes indicating particular types of
actions, such as "citation" or "monetary forfeiture." We worked
extensively with these officials to ensure that we searched for all of
the appropriate codes for enforcement actions. We did not analyze the
approximately 46,000 paper case files that FCC maintains. Our focus was
on the database systems for FCC's enforcement program. We also did not
analyze a lengthy text variable that FCC indicated might contain some
information on enforcement actions because the information was entered
in data fields that we could not search with our computer routines. To
determine why investigations were closed with no enforcement actions,
we attempted to identify a reliable variable in FCC's enforcement
database that clearly categorized the justifications for closing an
investigation with no enforcement action. No such variable exists. As
an alternative, FCC referred us to open-ended text variables in the
course of our audit work. We reviewed these variables, and in June
2007, told FCC officials that we could not use these variables because
they were not analyzable. We also discovered that some database fields
were frequently blank or, if completed, contained varying amounts of
text to justify the actions or lack thereof. Thus, we were not able to
use the databases to determine why investigations were closed with no
enforcement action.
In addition, we interviewed officials from FCC's CGB about the
Commission's overall approach for enforcing telecommunications laws and
rules, as well as its specific processes for handling complaints,
conducting investigations, and taking enforcement actions. We also
reviewed the FCC Enforcement Bureau's Enforcement Manual and the Code
of Federal Regulations to understand how FCC conducts investigations,
determines whether a violation has occurred, and whether an enforcement
action is appropriate. Finally, to ensure that we fully understood
FCC's process for handling complaints, conducting investigations, and
taking enforcement actions, in April, 2007, we provided FCC's
Enforcement Bureau and CGB officials with a written summary of its
processes for review. We revised our summary based on FCC's technical
comments.
To review how FCC assesses the impact of its enforcement program, we
interviewed both the Chief of the Enforcement Bureau and
representatives from each of the divisions about their methods for
assessing the effectiveness of their enforcement activities. We
reviewed FCC's Strategic Plan for 2006 through 2011, Fiscal Year 2006
Performance and Accountability Report, Fiscal Year 2006 Congressional
Justification of Estimates, and FCC's Enforcement Manual in order to
identify enforcement goals and performance measures. We also reviewed
provisions of the Government Performance and Results Act of 1993 (GPRA)
and prior GAO reports on the effectiveness of GPRA and the methods
other federal agencies use to measure their performance in order to
identify leading performance measurement practices. We also analyzed
FCC's quarterly complaint reports to assess the volume and subject
matter of complaints over the past 4 years. As part of our analysis of
the performance measures used by FCC's Enforcement Bureau, we also
interviewed officials from the Federal Trade Commission (FTC) to
identify their methods for assessing the effectiveness of their
enforcement program and obtained and reviewed information from FTC on
its enforcement activities, as well as its Strategic Plan for 2006
through 2011, and Fiscal Year 2006 Performance and Accountability
Report. To understand how FCC selects subjects and companies for
investigation, we reviewed documentation for FCC's Data Analysis Report
on Telecommunications and FCC reports based on that analysis for 2000
through 2006. In performing our work, we also reviewed and considered
best practices identified in previous GAO reports and guides issued
over the years on strategic plans and planning processes and the
implementation of GPRA requirements. These documents helped us to
compare the FCC Enforcement Bureau's management practices with those of
leading organizations.
To obtain views on the effectiveness of FCC's enforcement efforts, we
contacted 25 telecommunications companies and obtained interviews with
executives from 15 of them. Of the 15 companies, 4 were in the radio
and television broadcasting industry; 4 were in the cable and satellite
industry; and 7 were in the wireless and wireline industry. In making
this selection, we chose companies based on the following criteria:
type of communication services provided (radio and television
broadcasting, cable and satellite, wireless and wireline
telecommunications services) and company size (small, medium, and
large) according to FCC and industry data. We also contacted seven
experts with knowledge of the telecommunications sector and FCC's
enforcement program and obtained interviews with five of them. Among
the five experts, two are academicians who have taught and written
extensively about telecommunications, and the other three once held
positions at FCC but are no longer employed at the Commission. The
views we obtained from stakeholders and experts may not be
representative of all stakeholders, but we asked both experts and
stakeholders about similar issues.
Finally, to identify challenges FCC faces in providing complete and
accurate information on its enforcement program, we interviewed FCC
officials to understand how complaints are processed, investigated, and
resolved. We obtained from FCC six different databases in various
formats, five from the Enforcement Bureau and one from CGB; sent and
received answers to data reliability questions; and discussed the
limitations of each of the Enforcement Bureau's databases with staff
from each of the divisions in the Enforcement Bureau. We examined each
database for consistency in order to determine if the fields were
sufficient for use. Based on this analysis, we developed a list of
fields we could use from each database and compared the fields across
databases to determine what data elements could be reported across all
databases. We found that we were limited in what we could report.
We conducted this performance audit from November 2006 through December
2007 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Comments from the Federal Communications Commission:
Federal Communications Commission:
Washington, D.C. 20554:
Mr. Mark Goldstein:
Director, Physical Infrastructure:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Mr. Goldstein:
Thank you for the opportunity to respond to the draft Government
Accountability Office (GAO) report concerning the enforcement processes
of the Federal Communications Commission (FCC or Commission) for the
period January 1, 2003 through December 31, 2006.
The Commission is a proponent of strong enforcement action to protect
consumers and to ensure the Communications Act of 1934, as amended (the
Act), is carried out in the manner intended by Congress. During
Chairman Martin's tenure, the Commission has undertaken more than 3,400
enforcement actions. These enforcement actions have resulted in
assessing more than $65.7 million in fines, forfeitures, and consent
decree payments – including more than $43 million in 2007 alone, which
the GAO acknowledges is the highest annual amount since the Enforcement
Bureau was created in 1999. [Footnote 31] In addition, the Commission
has devoted significant resources to reviewing and taking action on a
backlog of more than 113,000 consumer complaints; as a result, the
Commission no longer has a backlog of these complaints and now takes
action faster on a consumer's complaint.
Because the Commission's enforcement program is an important tool for
ensuring the statutory goals of the Act are met, we welcome
recommendations on making improvements. In its draft report, the GAO
recommends that the Commission improve how it collects and analyzes
enforcement-related data (e.g., complaints received, investigations
conducted, enforcement actions taken). Indeed, the report concludes
that "[l]imitations in FCC's current approach for collecting and
analyzing enforcement data constitute the challenge FCC faces in
providing complete and accurate information on its enforcement
program." [Footnote 32] In addition, the GAO recommends that the
Commission develop and implement performance management practices,
including the establishment of goals and performance measures. See GAO
Draft Report at pages 35-36.
I am pleased to report that the Commission has already implemented
measures that address both GAO recommendations. The GAO report focuses
on the period from 2003 through 2006. As staff indicated to the GAO
during its examination, by the time of this audit, we were already
aware of these issues and already had plans in place to improve both
the Commission's enforcement data collection and processes.
First, the Commission had recognized that one of its principle
challenges was its limited information systems and database management
resources. By July 2007, the Commission had already secured
Congressional approval to make significant modifications to the
databases and systems used to support the Commission's enforcement
activities. [Footnote 33] The budget and planning processes for these
systems enhancements had been underway for some time, and we expect
final delivery this year. We anticipate that this system will enhance
the Commission's ability to collect more detailed complaint information
from consumers as well as improve the Commission's case management
system to better track the status of all enforcement complaints
throughout the process.
Second, during Chairman Martin's tenure, the Commission has implemented
standardized enforcement performance goals to better manage the
enforcement process and to automate portions of this process. [Footnote
34] The Commission implemented an internal performance measurements
program (including the establishment of written internal controls) to
collect data used to assess the performance and accountability of the
enforcement program. For the first time, under Chairman Martin, goals
and measures for managing the enforcement processes have been
incorporated into the performance plans of the senior executives
responsible for oversight of the enforcement program. Information about
these efforts is also included in the Commission's annual Performance
and Accountability Report and will be included going-forward in the
Commission's annual performance budget submissions to Congress.
Unfortunately, the GAO Report contains several errors that detract from
its utility. We raised these problems with GAO during the course of its
examination, but the flaws remain in the draft report. We have included
additional information in the attachment to this letter to respond to
the GAO's report.
First, the GAO relied on information that is significantly out-of-date
in making its conclusions and recommendations. In some cases, the GAO
relied on information more than four years old rather than examine more
current information. By relying on information that is out-of-date, the
GAO's draft report provides a misleading description of the
Commission's current enforcement processes. For example, the GAO
describes the Commission's former consumer complaint processes on page
6 of its draft report. However, because we had already concluded that
the former process needed to be changed to enforce the Commission's
consumer protection rules, we had already changed the process by which
the Commission handles consumer complaints. Today, unlike the past
practices that had been used since the Enforcement Bureau was started
in 1999, the Commission responds to 100% of consumer complaints. The
GAO's report, however, fails to acknowledge or assess the new process
and incorrectly describes the Commission's current consumer complaint
process. This is particularly unfortunate because our new process for
handling consumer complaints has realized meaningful benefits. For
example, the Commission issued 412 citations for violations of the junk
fax rules in 2007, which was approximately a 350% increase over the 91
citations issued in 2006 and a 984% increase over the 38 citations
issued in 2004. [Footnote 35]
Similarly, during the 2003-2006 period the GAO examined, the Commission
did not regularly collect and review data to measure the performance of
the enforcement program. This issue has been addressed. As noted above,
the Commission reports on these performance measures in its annual
Performance and Accountability Report and, going-forward, will provide
performance information in its annual budget submission to Congress. We
are concerned that GAO's failure to examine current practices and
processes significantly diminishes the value of the report.
Second, in addition to using outdated information, the GAO made errors
in presenting certain data. During the preparation of this report, the
Commission informed the GAO of our concerns that the draft report
contained factual flaws. For example:
* the GAO draft report at pages 19-20 (Table 2) contains inaccurate
information regarding the number and types of investigations and
enforcement actions taken by the Commission. Table 2 overstates the
number of enforcement investigations that were closed without action
because it fails to acknowledge certain actions taken by the Commission
such as findings of compliance, denials, and dismissals for
insufficient information provided by the complainant. Attachment 3
provides Commission data side-by-side to GAO's data as set forth in the
chart. The Commission's chart in Attachment 3 provides data on
enforcement actions which are contained in the Commission's databases
and paper files.
* the data presented on pages 19-20, which the GAO derived from the
Commission's databases, does not correspond to the information
contained in our databases. The GAO's draft report at pages 19-20
significantly understates the number of admonishments/warnings,
citations, consent decrees, monetary forfeitures, and notices of
violation issued [Footnote 36] and the report overstates the number of
investigations conducted during the 2003-2006 period. [Footnote 37]
* the GAO's draft report at pages 19-20 also significantly overstates
the number of investigations closed with no action. [Footnote 38] In
its draft report, the GAO states that the Commission closed with no
action 8,628 investigations concerning antenna lighting and structure
requirements. Had GAO scrolled to the problem resolution section of the
Commission's database it would have found readily available information
indicating that action had indeed been taken on a large portion of
these investigations. [Footnote 39] The problem resolution section of
the database contains a written description of the finding made by an
Enforcement Bureau employee for a particular investigation (e.g., no
violation found). Attachment 6 shows the problem resolution field in
the database for an antenna lighting and structure requirement
investigation. In addition, the Commission maintains files on each
investigation conducted by a field agent or other Commission personnel.
Because the GAO limited its inquiry to Commission databases, it failed
to accord for the outcomes of field investigations recorded in paper
files. In fact, the Commission's databases and paper files verify that
a significantly smaller number of investigations were closed with no
action than reported by the GAO. Only 32 investigations were closed
with no action instead of the 8628 contained in the GAO Report, a
difference of 26,863%. [Footnote 40]
* the GAO's draft report at pages 16-17 significantly overstates the
total number of investigations that were listed as closed with no
enforcement action. In its draft report, the GAO states that "about 83
percent or about 32,200 of the investigations were listed as closed
with no enforcement action." [Footnote 41] Attachment 2, however,
indicates that only 3 percent of investigations were closed with no
enforcement action taken. In fact, 71 percent of investigations were
closed with compliance found, 15 percent closed after taking action,
and 11 percent were closed as a result of insufficient information
being provided by the complainant. See Attachment 2. Had GAO scrolled
through the problem resolution or similar notation sections of the
Commission's databases it would have found readily available data
indicating that action had indeed been taken on all the domestic
interference, indecency, CPNI certification, audits of certification-
based facilities, Emergency Alert System requirements, and Cable TV
leakage investigations listed in the Report. [Footnote 42] As
demonstrated in Attachment 7 showing examples of actual investigations
of various types in the databases, the problem resolution section of
the database memorializes findings made by the Enforcement Bureau staff
during a particular investigation. The notation would indicate whether
a finding of compliance was made, whether the investigation was
dismissed for insufficient information provided by the complainant, or
whether the issue was resolved at the time of inspection (e.g.,
interference resolved prior to inspection). In addition, the Commission
maintains paper files on each investigation conducted by a field agent
or other Commission personnel. The Commission's databases and paper
files verify that a significantly smaller number of investigations were
closed with no action than reported by the GAO. [Footnote 43] Only 576
investigations were closed with no action instead of the 32,237
contained in the GAO Report. [Footnote 44]
* the GAO's draft report at pages 12-13 (Figure 1) only reflects the
status of complaints received by the Consumer and Governmental Affairs
Bureau (CGB) during the year in which the complaint was received. The
chart does not capture information about the disposition of complaints
received in one year and resolved in a subsequent year. The draft
report thus leaves the impression that complaints were unresolved when
in fact they were resolved, albeit in a subsequent year. Attachment 1
provides the number of complaints received from 2003-2006 and indicates
that no complaints are pending for 2003, 2004, and 2005. Only 62
complaints are pending for 2006.
Because the GAO failed to identify which complaints or cases were in
the "all other investigations" or "general enforcement" categories, we
were unable to resolve the data inconsistencies and inaccuracies in the
draft report.
Third, the GAO makes a number of incorrect statements in its report.
For example, the GAO states on page 3 that the Commission's existing
enforcement databases do not contain information about the disposition
of a complaint (e.g., whether the Commission took enforcement action or
concluded that no violation occurred). This is incorrect — the
Commission's systems do contain this information. This information
resides in the problem resolution or similar notation sections of the
Commission's database systems. This section of the database was readily
accessible to GAO during the course of their investigation. We informed
the GAO about the disposition information on several occasions and
offered to make technical assistance available.
Finally, the GAO's draft report fails to include important information
to assist the reader of the report. For example, the GAO's description
of the Commission's enforcement processes and statutory authority fails
to include any discussion about the legal standards applicable to the
Commission's enforcement process, including the appropriate burden of
proof the Commission must meet in order to issue a notice of apparent
liability, citation, notice of violation, admonishment, or warning.
Similarly, on page 10 the GAO failed to discuss other sections of the
Act that provide authority for fines or sanctions or the procedural and
other legal requirements that govern license revocation proceedings. By
leaving this important information out of the draft report, the GAO
provides an incomplete and misleading picture about the legal
environment in which the Commission's enforcement activities operate.
Although we are concerned about the flaws in the GAO's examination
noted above, we do appreciate the GAO's examination into the
Commission's enforcement processes. Moreover, we agree that the
Commission needed to improve our data management systems from the
limited time frame examined, for which we have already contracted, and
provide specific enforcement goals, which we have already implemented.
We look forward to working with the GAO on this and other matters in
the future.
Sincerely,
Signed by:
Kris Anne Monteith:
Chief, Enforcement Bureau:
Attachments:
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, individuals making key
contributions to this report include Tammy Conquest, Assistant
Director; Eli Albagli; Martin De Alteriis; Konstantin Dubrovsky; Sharon
Dyer; Bess Eisenstadt; Heather Frevert; Mitch Karpman; Josh Ormond;
Mindi Weisenbloom; and Nancy Zearfoss.
[End of section]
Footnotes:
[1] We initially requested data from CGB and the Enforcement Bureau's
databases for calendar years 2000 through 2006 but were told that
information from CGB was only available for calendar years 2003 through
2006. Thus, to be consistent in reporting the results of our review, we
are reporting data from 2003 through 2006.
[2] In 1991, Congress enacted TCPA to address a growing number of
telephone marketing calls and certain telemarketing practices thought
to be an invasion of consumer privacy and, in some cases, costly to
consumers. See 47 USC 227.
[3] GAGAS does not require us to print in its entirety responses
submitted by an agency in connection with our reports and allows us to
characterize responses where suitable and to include or not to include
them as appropriate.
[4] FCC refers to the complaints it receives as formal and informal;
however, for purposes of this report we are not making that
distinction.
[5] 47 C.F.R. § 1.717.
[6] 47 C.F.R. § 1.717-1.718. Special rules apply to the handling of
informal slamming complaints. See 47 C.F.R. 1.719.
[7] Other FCC bureaus continue to handle some enforcement issues. For
example, enforcement issues related to licenses are handled by the
relevant licensing bureau.
[8] For purposes of this report, we are including the 25 field offices
as one of the Enforcement Bureau's five divisions.
[9] According to FCC, besides enforcement actions, investigations may
also result in denials, dismissals, or a determination that a party
complied with relevant rules.
[10] According to FCC, a cease and desist order can only be issued by
the Commission or an administrative law judge following a hearing.
[11] 47 CFR § 54.8.
[12] According to FCC, as with cease and desist orders, a revocation of
license can only be issued by the Commission or an administrative law
judge following a hearing.
[13] Other forfeiture amounts or other sanctions are established in
other sections of the Communications Act of 1934, as amended, including
sections 202(c); 203 (e); 205(b); 214(d); 219(b); 220(d); 364(a)-(b);
386(a)-(b); and 634.
[14] See 47 C.F.R. § 1.80 for current maximum forfeiture amounts. In
accordance with the inflation adjustment requirements contained in the
Debt Collection Improvement Act of 1996, Pub. L. 104-134, Sec. 31001,
110 Stat. 1321, the Commission has twice implemented an increase of the
maximum statutory forfeiture amounts.
[15] See Forfeiture Policy Statement and Amendment of Section 1.80 of
the Rules to Incorporate the Forfeiture Guidelines, Report and Order,
12 FCC Rcd 17087 (1997) ("Forfeiture Policy Statement"), recon. denied,
15 FCC Rcd 303 (1999); 47 C.F.R. § 1.80(b)(4), note to paragraph
(b)(4).
[16] Under FCC's TCPA rules, no person or entity may initiate any
telephone solicitation to a residential telephone subscriber before 8
a.m. or after 9 p.m., based on the called party's local time. 47 C.F.R.
64.1200(e)(1).
[17] The Enforcement Bureau does not investigate every complaint
received by CGB. We were not able to identify the number of complaints
from CGB's database that the Enforcement Bureau selected for
investigation.
[18] For public safety purposes, FCC requires owners to register
antenna structures that are more than 200 feet in height or located
near an airport.
[19] Under section 271 of the Communications Act of 1934, as amended,
the Bell Operating Companies (BOC) needed to file applications with FCC
on a state-by-state basis in order to provide in-region, interLATA
services. In 2002, the Enforcement Bureau set up a Section 271
Compliance Review Program for each newly filed section 271 application.
As of December 3, 2003, the Commission had granted all of the BOCs
section 271 authorization for the provision of in-region, interLATA
services in all of the BOCs' territories nationwide.
[20] Fox Television Stations, Inc. v. FCC, 489 F.3d 444 (D.C. Cir.
2007), petition for cert. filed, No. 07-582, 2007 Westlaw 3231567 (Nov.
1, 2007); Complaints Against Various Television Licensees Concerning
Their February 1, 2004 Broadcast of the Super Bowl XXXVII Halftime
Show, pet. for rev. pending sub nom. CBS Corp. v. FCC, No. 06-3575 (3d
Cir. Filed July 28, 2006).
[21] As our sample size was small and nongeneralizeable, the views we
obtained may not be representative of all stakeholders. However, we
asked experts and company representatives about similar issues.
[22] According to an FCC official, while the Enforcement Bureau does
not have outcome goals, it does have some output goals. As an example
of FCC's output goals, the official provided us with a copy of a March
31, 2006, letter sent to the Chairman, Subcommittee on Commerce,
Justice, Science, and Related Agencies, House Committee on
Appropriations. In response to questions from the Chairman, FCC wrote
that the Commission attempts to resolve public safety interference
complaints within 1 day, nonemergency interference complaints within 1
month, indecency complaints within 9 months, formal complaints within 1
year, and all other investigations and complaints within 15 months.
[23] Pub. L. No. 103-62, 107 Stat. 285.
[24] GAO, Results-Oriented Government: GPRA Has Established a Solid
Foundation for Achieving Greater Results, GAO-04-38 (Washington, D.C.:
Mar. 10, 2004); GAO, Managing for Results: Strengthening Regulatory
Agencies' Performance Management Practices, GAO/GGD-00-10 (Washington,
D.C.: Oct. 28, 1999); and GAO, Agency Performance Plans: Examples of
Practices That Can Improve Usefulness to Decisionmakers, GAO/GGD/AIMD-
99-69 (Washington, D.C.: Feb. 26, 1999).
[25] GAO, Pipeline Safety: Management of the Office of Pipeline
Safety's Enforcement Program Needs Further Strengthening, GAO-04-801
(Washington, D.C.: July 23, 2004).
[26] GAO, Telecommunications: Weaknesses in Procedures and Performance
Management Hinder Junk Fax Enforcement, GAO-06-425 (Washington, D.C.:
Apr. 5, 2006).
[27] According to an FCC official, the Commission is planning to spend
$2 million to improve its existing systems for receiving, processing,
and enforcing consumer telemarketing complaints alleging violations of
junk fax and do-not-call list request but has not finalized its plans
to improve the Enforcement Bureau's databases.
[28] FCC may choose to initiate a forfeiture proceeding separate and
apart from a formal 208 complaint proceeding. The complainant would not
be a party to such a forfeiture proceeding.
[29] The Market Disputes Resolution Division does not impose fines.
[30] Generally accepted government auditing standards do not require us
to print responses submitted by an agency in connection with our
reports in their entirety and allows us to characterize responses where
suitable, and to include or not to include responses as appropriate.
[31] See Attachment 4.
[32] GAO Report at 4.
[33] Letter from Anthony J. Dale, Managing Director, FCC, to individual
Members of the House Appropriations Subcommittee on Financial Services
and General Government and the Senate Appropriations Subcommittee on
Financial Services and General Government (June 27, 2007).
[34] In March 2006, the Commission resolved to work on public safety
interference complaints within one day; non-emergency interference
complaints within one month; indecency complaints within nine months;
and formal complaints within one year. The Commission works to resolve
all other investigations and complaints within 15 months. The
Commission publicly reports on its progress at meeting these
performance goals in our annual Performance and Accountability Report.
Below are the results from the Commission's 2007 Performance and
Accountability Report. The indecency complaints are currently involved
in litigation.
Enforcement Investigations Performance Results – 2007:
Category: Public Safety Interference;
No. of Investigations Meeting Goal: 388;
No. of Investigations Not Meeting Goal: 0;
% Meeting Goal: 100%.
Category: Non-Emergency Interference;
No. of Investigations Meeting Goal: 895;
No. of Investigations Not Meeting Goal: 15;
% Meeting Goal: 98.35%.
Category: Formal Complaints;
No. of Investigations Meeting Goal: 6;
No. of Investigations Not Meeting Goal: 2;
% Meeting Goal: 75%.
Category: Indecency Complaints;
No. of Investigations Meeting Goal: 601;
No. of Investigations Not Meeting Goal: 2625;
% Meeting Goal: 18.63%.
Category: Other Investigations/Complaints;
No. of Investigations Meeting Goal: 29608;
No. of Investigations Not Meeting Goal: 75;
% Meeting Goal: 99.75%.
[35] See Performance and Accountability Report for Fiscal Year 2007 at
56 (Nov. 15, 2007).
[36] The GAO's draft report on pages 19-20 indicates that the
Commission issued 2279 enforcement actions admonishments/warnings,
citations, consent decrees, debarments, monetary forfeitures, and
notices of violation for investigations involving antenna lighting and
structure requirements, junk fax, domestic interference, indecency,
CPNI certification, audits of certification-based facilities, emergency
alert system requirements, and cable TV leakage during 2003 to 2006;
Commission data, however, indicates that 3679 enforcement actions were
initiated during that same time period. See Attachment 3. In
particular, while pages 19-20 of the GAO's draft report indicate the
Commission issued 1058 admonishments and warnings during the time
period for these investigations, Commission records indicate that 2570
admonishments and warnings were issued during that time period. Id.
[37] The GAO's draft report on pages 19-20 indicates that the
Commission's Enforcement Bureau handled 38,786 investigations from 2003
through 2006; instead the Commission's Enforcement Bureau handled
25,351 investigations during this period. See Attachment 3.
[38] See Attachment 3.
[39] See Attachment 3.
[40] See Attachment 3.
[41] GAO Report at 16.
[42] See Attachment 3.
[43] Data from the Enforcement Bureau's database and paper files
reveals that only 3% of investigations were opened with no enforcement
action, a number significantly lower than GAO's 83%. See Attachment 5.
[44] See Attachment 2.
[End of section]
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E-mail: fraudnet@gao.gov:
Automated answering system: (800) 424-5454 or (202) 512-7470:
Congressional Relations:
Ralph Dawn, Managing Director, dawnr@gao.gov:
(202) 512-4400:
U.S. Government Accountability Office:
441 G Street NW, Room 7125:
Washington, D.C. 20548:
Public Affairs:
Chuck Young, Managing Director, youngc1@gao.gov:
(202) 512-4800:
U.S. Government Accountability Office:
441 G Street NW, Room 7149:
Washington, D.C. 20548: