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Telecommunications Update – FCC Fines Canadian Pacific Railway for Licensing Violations

August 31, 2016

FCC Fines Canadian Pacific Railway for Licensing Violations

The FCC’s Enforcement Bureau announced that it has entered into a Consent Decree with Soo Lin Corporation, the US holding company for Canadian Pacific Railway Company (“Canadian Pacific”),  whereby Canadian Pacific will pay $1.2 million dollars to resolve an investigation into the railroad company’s operation of more than 100 wireless radio facilities without prior FCC approval and for failing to obtain FCC authorizations for the transfer of control of 30 wireless radio licenses.  A company-wide internal audit uncovered the unauthorized transactions dating back to 2008, as well as the construction, relocation, modification and operation of more than 100 wireless facilities without FCC approval, some dating back as far as 1979.

In addition to the monetary civil penalty, the Consent Decree provides that Canadian Pacific will implement a 3-year FCC compliance plan, develop and distribute a company compliance manual, develop an employee FCC compliance training program, and submit compliance reports to the FCC on a regular basis, in addition to reporting any new noncompliance matters that are discovered or should arise.

This penalty size and amount is a reminder to private land mobile radio station licensees or business radio licensees of the importance of compliance with FCC rules and regulations for wireless licenses.  Companies with these licenses need to ensure that they have internal procedures in place, including a compliance officer, to ensure proper FCC filings are made for any new construction, modifications or relocations of any mobile radios.  Companies also need to remember that any direct changes in the ownership of an FCC licensee require application and notification to the FCC.  While most companies that hold private land mobile and business radio licenses are primarily engaged in non-telecommunications business (such as mining, production, railroads, airports, energy, marine use), this extensive penalty serves as a reminder of the importance that communications plays in the functioning of a company’s day-to-day operations.  Given this vital role, the FCC licenses authorizing these communications functions must be given a prominent position in any such company’s compliance plans and regulatory reviews and operations.