Failure to Comply with FCC Rules Can Harm Mining Companies

Failure to Comply with FCC Rules Can Harm Mining Companies

Alan Fishel


Many non-telecommunication companies have learned the hard way that certain Federal Communications Commission (FCC) rules apply to them. Such companies discover they are subject to FCC rules only after it is too late to avoid receiving a substantial fine, having critical communications facilities shut down, or being harmed in other ways. Some important FCC rules and regulations apply to thousands of non-telecommunication companies – including many mining companies – and in numerous instances these companies aren’t even aware that the rules apply to them.

Does the mine use mobile units for communications between office-based mine personnel and employees in the field, between employees in the field, or between it and public safety (ambulance, fire, etc.) organizations, which service is not being provided by a commercial provider? Does the company use microwave systems to carry or relay voice, teletype, facsimile, or digital communications?

If the answer to either of those questions is yes, many FCC rules and regulations almost certainly apply to that company and it almost certainly should have an FCC private wireless license. And, if the company has or should have a private wireless licenses it’s subject to many FCC rules.

To avoid violating FCC rules and regulations, a mine manager should consider consulting with attorneys who specialize in this field. This is because licensing decisions should take into account not only the critical technical details, but also the FCC’s many legal requirements and the mine’s business goals and objectives. Full compliance with the FCC’s licensing rules is possible only with full knowledge of every current technical and legal requirement, and the monitoring of any rule changes adopted at the FCC. The mine should not rely exclusively on its engineering staff to meet its legal needs with respect to these issues regardless of how skilled its staff may be.

If a mining company is currently in violation of any rules and regulations, not only is it obligated to notify the commission, but the FCC ordinarily looks far more favorably on companies that voluntarily disclose violations when it is deciding on what penalty, if any, to give to a company in violation of its rules.


Prior to consulting with attorneys, a mine manager may want to have a general understanding of some common mistakes made by licensees. These mistakes, described below, can not only lead to fines, which are sometimes in the 6-figure range, but such mistakes can also result in the cancellation of licenses and the shutdown of important communications facilities.


Failure to get FCC licenses before operating facilities where a license is necessary;


Failing to timely construct the authorized facilities or failure to notify the FCC by a specified deadline that the facilities have been constructed;


Failure to file the appropriate applications and obtain FCC approval prior to changing the frequency or location of transmitting facilities;


Failure to comply with important, yet often overlooked, FCC operational and record-keeping regulations;


Failure to file the necessary applications and failure to receive FCC approval prior to purchasing or selling the stock of companies that have FCC licenses, or prior to performing certain internal restructuring of companies with FCC licenses; and


Failure to file the necessary applications and failure to receive FCC approval prior to purchasing or selling assets associated with FCC licenses.

Mining companies must obtain FCC licenses before operating facilities for which a license is necessary, or they will be operating illegally and they may be subject to significant fines as well as a shutdown of the communications facilities. Obtaining such approval requires legal, and technical expertise as well as intimate knowledge of the FCC’s computerized application submission process. Companies often fail to receive authorization prior to performing internal restructurings that result in the transfer of control of licenses under FCC rules and regulations, or prior to purchasing or selling the stock of companies with the licenses. FCC authorization is required prior to completing transfers of control of FCC licenses, whether such result from internal restructurings or the purchase or sale of stock of a company.

Whenever a mining company intends to enter into a purchase or sale of assets, a transaction involving a transfer of a controlling stock interest from one company to another, an internal reorganization or a transaction among affiliates, it’s critical that experienced counsel determine whether the licenses are among the assets being sold; and/or whether they are held by the companies involved. Furthermore, if private wireless licenses are involved, counsel should be retained to prepare and file applications with the FCC and obtain approval for the license transfers before the transaction is completed.

In sum, the FCC strictly enforces its licensing rules and failure to comply with these requirements may result in cancellation of a coal company’s licenses and the imposition of substantial fines. Mining companies should take all steps necessary to ascertain whether it’s in compliance with the rules, and to rectify any non-compliance. This is certainly one area where an ounce of prevention is worth a ton of cure.

Fishel (202/857-6450, ) is a partner and Rummel (202/715-8479, ) is a senior associate in the telecommunications group of the law firm of Arent Fox in Washington, D.C. They offer any coal company a free consultation to discuss its FCC licensing matters.

FCC Fines

The amount of an FCC fine can be increased or decreased based on a variety of factors, including the number of licenses and locations involved. In addition, the FCC uses the following specific “Upward” and “Downward” adjustment criteria to determine whether a greater or lesser fine should be imposed in each case:

Upward Adjustment Criteria

*Egregious misconduct.

*Ability to pay/relative disincentive.

*Intentional violation.

*Substantial harm.

*Prior violations of any FCC requirements.

*Substantial economic gain.

*Repeated or continuous violation.

Downward Adjustment Criteria

*Minor violation.

*Good faith or voluntary disclosure.

*History of overall compliance.

*Inability to pay.

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