In many ways, the America Movil Notice of Apparent Liability is a typical unauthorized transfer of control case. The company engaged in a transaction that changed its ownership without seeking prior FCC approval. As we've noted, such cases typically generate a fine of $8,000, an amount that seems too small in proportion to other violations. What's notable here is that the Bureau doubled the standard fine (i.e., applied an "upward adjustment") against the company that committed the violation.
The facts in the case are not disputed. According to the NAL, America Movil, the parent company of Puerto Rico Telephone Company, Inc. (“PRTC”), increased the foreign ownership held by the family of Mr. Carlos Slim Helu ("Slim Family"), one of Mexico's wealthiest families. America Movil admitted that it issued additional stock that increased the Slim Family’s equity holdings in America Movil from 32.4 percent to 40.18 percent, without FCC authorization. Thus, the Bureau found that America Movil willfully violated Section 310(b)(4) of the Communications Act and a 2007 Declaratory Ruling limiting the Slim Family's foreign ownership.
But the Bureau did not increase the penalty because the violation was deliberate or knowing. Instead, citing America Movil's approximately $48 billion in revenue and $7 billion in profits, the Bureau proposed to double the standard $8,000 fine. As the Bureau explained:
We conclude that America Movil’s ability to pay warrants an upward adjustment of the base forfeiture amount. To ensure that a proposed forfeiture is a deterrent, and not simply a cost of doing business, the Commission has determined that large or highly-profitable companies, such as America Movil, may be subject to proposed forfeitures that are higher than the base forfeiture amount. Given America Movil’s size and its ability to pay a forfeiture, we conclude that an upward adjustment of the base forfeiture amount from $8,000 to $16,000 is appropriate.
The Commission has vowed to implement upward adjustments like this in the past, most notably in cases involving the former "Baby Bell" telephone companies. But this is the first time in several years that the Commission has applied such an upward adjustment. We shall see if this upward adjustment becomes a trend or remains an anomaly.