FCC fines CN for violating radio license regulations

CN has agreed to pay a civil penalty of $5.25 million to resolve a Federal Communications Commission (FCC) Enforcement Bureau investigation into the railroad's acquisition and operation of hundreds of wireless radio facilities in the United States without prior commission approval, the FCC announced on Sept. 11.

Some of the unauthorized operations continued for more than two decades before CN disclosed its violations to the commission, FCC officials said in a press release.

"Today’s action sends a clear and strong message to the railroad industry, as well as other industries that rely on wireless technology, that they will face very serious consequences when they fail to comply with the commission’s rules,” said Travis LeBlanc, chief of the FCC's enforcement bureau. "The commission has a fundamental obligation to prevent the unauthorized transfer of radio licenses to unqualified parties, and to prevent unlicensed radio operations that can interfere with lawful radio communications."

In 1995, CN acquired a number of railroads in the United States holding FCC authorizations in wireless radio services. The Class I's 2012 internal audit of its FCC authorizations uncovered unauthorized transactions dating back to 1995, and it also revealed that CN and its predecessors had constructed, relocated, modified or operated several hundred wireless facilities without commission approval, beginning as far back as 1990, FCC officials said.

The bureau's investigation of CN revealed numerous instances of non-compliance with FCC licensing regulations, including that the railroad operated several hundred licenses without commission authorization, FCC officials said.

The civil penalty of $5.25 million represents the largest in FCC history for unauthorized radio operations and transfers of control. Under the terms of a consent decree, CN also will implement a three-year plan to ensure its compliance with FCC requirements and continue to maintain an internal compliance plan that the railroad implemented after discovering the violations.

Since its voluntary disclosure to the commission, CN has cooperated with the FCC on a full review of the railroad's communications licensing practices and procedures, CN officials said in a prepared statement. The Class I immediately appointed a FCC compliance officer, developed an extensive compliance and training program to ensure compliance with FCC licensing requirements and address obligations going forward, and filed all required corrective applications, which the FCC has granted, they said.

"Other measures have been successfully implemented in accordance with with FCC requirements," CN officials said.

Although the railroad was non-compliant with respect to some FCC regulations regarding radio licenses, at no time did the compliance matters affect the safety of railroad operations, they said.

"As noted in the FCC consent decree, there were no complaints about CN operations interfering with other entities' radio communications," CN officials said.