Background and Inspection Findings
On September 13, 1992, an inspection by the FCC Baltimore Office revealed that Advanced Computer & Engineering (ACE) displayed and offered for sale various personal computers and computer systems lacking required FCC identification numbers and certification. The equipment included 486 50 MHz, 486 33 MHz, and 386SX 33 MHz computer systems, as well as a 386 33 MHz system in a desktop case.
During the inspection, ACE President David Cheng stated that the systems were FCC Class B certified but improperly labeled, promising to provide appropriate documentation. Following the inspection, the Baltimore Office issued a Notice of Apparent Liability on September 29, 1992, for violations of Section 302 of the Communications Act of 1934 and Section 2.803 of the Commission's Rules. After receiving no response, the Baltimore Office issued a Forfeiture Order on November 17, 1992, in the amount of $20,000.
Equipment Authorization Review and Petition for Reconsideration
ACE provided documentation on December 22, 1992, and filed a Petition for Reconsideration under Section 1.106 of the Commission's Rules seeking cancellation of the penalty based on business dissolution and financial inability to pay.
Commission staff cross-referenced the provided identifiers against FCC databases and identified several discrepancies between the displayed equipment and grant records:
- A grant under FCC ID IXD486-33AD covered a 'Baby AT-Desktop Computer,' whereas the 486-33 MHz unit displayed was in a mid-size tower case.
- There was no authorization record for FCC ID JVD386SXIDT, although applications for similar numbers (JVD386SX33IDT and JVD386SX33IMT) were pending.
- A grant under FCC ID HVJ3D86432 covered a 'mini tower computer' but did not cover the displayed 386-33 MHz desktop computer.
Bureau Analysis and Forfeiture Reduction
The Field Operations Bureau reviewed documents concerning ACE's voluntary dissolution and financial posture. ACE submitted unreviewed and unaudited financial statements from its accounting firm, which the Bureau determined did not present reliable financial information.
However, the Bureau determined that ACE's submitted 1992 tax return, which demonstrated gross profits alongside ordinary income losses, provided sufficient basis to justify a reduction. Applying the Commission's Policy Statement on Standards for Assessing Forfeitures (8 FCC Rcd 6215), the Bureau reduced the forfeiture penalty from $20,000 to $7,000.