******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Media General Cable ) of Fairfax County ) NAL / Acct. No. 812CB0003 ) Apparent Liability ) for Forfeiture ) NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: May 8, 1998 Released: May 12, 1998 By the Commission: I. INTRODUCTION 1. In this Notice of Apparent Liability for Forfeiture, we initiate enforcement action against Media General Cable of Fairfax County ("Media General") pursuant to Section 503(b) of the Communications Act of 1934, as amended. For the reasons discussed below, we find that Media General has apparently willfully or repeatedly violated Section 301 of the Communications Act in its operation of two Cable Television Relay Service ("CARS") stations formerly licensed as WGJ-469 and WGJ-470 from May 12, 1997 to May 21, 1997, without Commission authorization. Based on our review of the facts and the circumstances surrounding these violations, we find that for its conduct Media General is apparently liable for forfeiture in the amount of eighty-thousand dollars ($80,000). II. BAC KGROUND 2. Cable operators utilize CARS stations to distribute programming to microwave hubs where it may be physically impossible or too expensive to run cable. In this capacity, CARS stations are either point-to-point or point-to-multipoint microwave systems. CARS stations are not used to distribute programming directly to subscribers. The operation of a CARS station requires a license from the Commission pursuant to Section 301 of the Communications Act of 1934, as amended, and Sections 78.13 and 78.15 of the Commission's rules. A CARS license is obtained through the filing of an application ("Form 327") with the Commission. Form 327 requires the applicant to submit detailed technical information on the planned construction and operation of the CARS transmission facilities. The Commission issues CARS licenses based on the representations made in these applications. The licenses are issued for a period of five years and can be renewed at five year intervals thereafter. 3. On August 12, 1996, Media General submitted new license applications for two CARS stations to serve its Fairfax County, Virginia franchise area. Public notice for these CARS applications was issued on September 25, 1996. During the pendency of these applications and prior to the Commission's grant of the licenses, Media General was apparently operating two CARS stations serving its Fairfax County cable system without Commission authorization. Media General filed these CARS applications in order to obtain current licenses for these two previously constructed and operating CARS stations whose licenses had expired on October 1, 1993. 4. On September 29, 1983, Media General originally obtained two CARS licenses, WGJ-469 and WGJ-470, in order to provide cable television service to its Fairfax County, Virginia franchise area. In accordance with the Commission's rules, Media General filed applications to renew the two licenses on October 1, 1988. When the licenses again expired in October 1, 1993, Media General filed applications for renewal. However, these applications were defective. The Commission staff uncovered various technical inconsistencies with these applications. When Media General did not respond to the Commission's requests to explain these inconsistencies, the Commission did not grant the renewal applications for WGJ-469 and WGJ-470. Media General continued to operate the two CARS stations relating to the expired licenses from October 1, 1993 to the present. 5. Media General's August 1996 applications for new CARS licenses were also defective. Specifically, the technical specifications stated in these applications were inconsistent with the specifications of the operating CARS stations whose licenses had expired. Beginning in August 1996, the Commission made numerous requests for additional information to correct these defects and to ascertain the two CARS stations' technical specifications and operations. Media General took several months to provide the Commission with all the relevant technical and operating data. To resolve this continued provision of inconsistent information, Commission staff requested to meet with Media General's representatives in January 1997. At that meeting, Media General confirmed that it engaged in numerous unauthorized modifications to the two CARS stations. In letters dated January 23, 1997 and February 6, 1997, counsel for Media General submitted information detailing these unauthorized modifications and changes to the CARS' transmission facilities. The two CARS stations' current call signs WLY-595 and WLY-596 replaced the old call signs WGJ-469 and WGJ-470, which related to the expired licenses. Although the letters referred to only one of the two CARS stations, the two CARS stations are part of an integrated system. CARS licenses are identified by the transmit location and the receive sites that they serve. In Media General's system, the two CARS stations shared several of the same receive sites -- the two transmitters served the same eleven receive sites. 6. On May 21, 1997, the Commission granted Media General's applications for new CARS licenses, satisfied that Media General provided the relevant information relating to the two CARS stations' operations. III. DI SCUSSION 7. Media General has apparently operated two CARS stations -- formerly licensed as WGJ- 469 and WGJ-470 -- in violation of Section 301 of the Communications Act. Section 301 of the Communications Act states in relevant part: [N]o . . . license [granted by Federal authority] shall be construed to create any right, beyond the terms, conditions, and periods of the license. No person shall operate . . . any communication or signals by radio . . . within the jurisdiction of the United States, except under and in accordance with this Act and with a license in that behalf granted under the provisions of this Act. In addition, Section 503(b) provides that any person who willfully or repeatedly fails to comply substantially with the terms and conditions of any license or fails to comply with any of the provisions of the Act or of any rule, regulation issued by the Commission thereunder, shall be liable for a forfeiture penalty. The term "willful" as used in Section 503(b) has been interpreted to mean simply that the acts or omissions are committed knowingly. It is not pertinent whether or not the licensee's acts or omissions are intended to violate the law. Based on what appears to be the undisputed facts in this case, Media General operated two CARS stations in its Fairfax County franchise area without Commission authorization from May 12, 1997 to May 21, 1997. Applying the appropriate legal standards, we find that Media General apparently willfully violated Section 301 of the Act by its unauthorized operation of the two CARS stations. Media General's actions in this case justify the issuance of this Notice of Apparent Liability pursuant to Section 503(b) of the Communications Act. 8. In determining the amount of forfeiture penalty that should be assessed for these violations, we are guided by Section 503(b)(2)(D) of the Communications Act. Section 503(b)(2)(D) states in relevant part: [T]he Commission . . . shall take into account the nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, ability to pay, and such other matters as justice may require. The amount of forfeiture penalty should take into consideration the severity of the instant violation, in addition to the status and prior offenses of the violator. Pursuant to the law, the Commission may impose a forfeiture amount up to the statutory maximum, which for cable operators is $27,000 for each offense or $275,000 for each continuing offense. In addition, the Commission determines amounts for forfeiture penalties on a case-by-case basis where the conduct in question occurred before the adoption of the Commission's Forfeiture Policy Statement. For a single Section 301 violation, unauthorized operation, the Commission has issued forfeitures up to and including fifteen thousand dollars ($15,000). In this case, Media General engaged in two continuing Section 301 violations, as it operated two CARS stations without proper authorization. Unlike prior cases involving unauthorized operations, Media General is distinguished for its apparent pattern of non-compliance and egregious behavior. Considering the history and severity of Media General's prior non-compliance, its unresponsiveness to Commission's requests, and its resources and ability to pay, we believe it is appropriate to assess Media General a substantial and meaningful forfeiture penalty. Such a forfeiture amount is consistent with Section 503(b)(2)(D) and advances the public interest. 9. Media General has repeatedly violated the Commission's licensing rules and practices. In this regard, Media General admits that it engaged in unauthorized construction and unauthorized modification of its CARS stations dating back to 1983, the year it first obtain the original licenses, WGJ- 469 and WGJ-470. Section 78.109 of the Commission's rules states, in relevant part, that modification applications are required for any change in the transmitting antenna system of CARS stations. Media General has stated that five transmitting antennas and their respective tower heights were modified and altered without Commission authorization. Four transmitting antennas and tower heights were never built to conform to their licensed specifications, and one tower was later modified from its licensed specifications sometime in late 1990 or early 1991. Media General admits that it never submitted the requisite modification applications relating to any of these changes. We also note that when Media General's licenses expired on October 1, 1988 and on October 1, 1993, Media General filed renewal applications stating that its technical parameters for its two CARS stations' did not change from their original licenses. Upon reviewing the record, we find Media General's CARS transmission facilities contained numerous technical changes. The level of care that Media General exhibited in filing its renewal applications falls far short of the conduct we except of Commission licensees. 10. Moreover, in cases where the violations potentially endanger the public safety, the Commission has substantially increased the forfeiture penalty. Media General's modification of its CARS facilities presents such a case, for the changes to the tower heights from a five foot to a forty-five foot differential posed a possible increased danger to air traffic. Because Media General did not file the modification applications, the Commission was unable to coordinate with the Federal Aviation Administration, which warns affected air traffic of such towers. 11. Media General failed to provide adequate and prompt responses to the Commission's numerous inquires. As detailed above, it took approximately eight months for the Commission to obtain all the relevant information relating to the two CARS stations which Media General was apparently operating without authority. Media General's piecemeal responses and evasive behavior delayed the review of its applications for new CARS licenses. We believe that Media General's conduct is directly responsible for the prolonged period of unauthorized usage of the CARS stations. Media General only admitted to its unauthorized use and modifications after the Commission uncovered substantial inconsistencies in its CARS applications. 12. Section 503 specifically directs the Commission to consider the violator's ability to pay in determining the appropriate forfeiture amount. Consistent with that statute's legislative history, the Commission is authorized to impose forfeiture sufficiently high to deter violations and constitute meaningful sanctions when violations occur. The forfeiture amount assessed should advance the policy of deterrence and should not be considered merely an affordable cost of doing business. Media General of Fairfax County serves over 220,000 subscribers, making it the largest cable system in the Washington, D.C. metropolitan area and among the top 20 in the nation. According to Media General's Consolidated Financial Statements for year 1996, its cable television operation had identifiable assets of $149,265,000, revenues of $146,159,000, and operating income of $24,600,000. In advancing the stated policy objectives of Section 503, the forfeiture amount we impose should reflect Media General's considerable financial resources. 13. The conduct of Media General in this case falls substantially short of the level of responsibility that the Commission expects from licensees, especially considering Media General's resources and the potential safety consequences of its actions. In view of the foregoing, and after careful consideration of the apparent facts and circumstances currently before us, including the factors stated in Section 503(b)(2)(D) we believe Media General's violations and related conduct, justify a total forfeiture of eighty-thousand dollars ($80,000). Moreover, we believe $80,000 to be a reasonable forfeiture when considering Media General's extensive assets and financial resources. 14. Pursuant to Section 1.80 of the Commission's rules, Media General will have the opportunity to submit evidence and arguments as to why the forfeiture penalty assessed by this Notice of Apparent Liability should not be imposed or should be reduced. Any such showing shall include a "detailed factual statement and such documentation and affidavits as may be pertinent." Other relevant provisions of Section 1.80 are summarized in the attachment. IV. CONCLUSIONS AND ORDERING CLAUSES 15. Based on the foregoing, we find that Media General operated two CARS stations formerly licensed as WGJ-469 and WGJ-470 without Commission authorization from May 12, 1997 to May 21, 1997, in violation of Section 301 of the Communications Act of 1934, as amended. We also find that Media General's conduct relating to these violations and its history of prior offenses warrant the imposition of a substantial forfeiture. 16. Accordingly, IT IS ORDERED, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. 503(b), and Section 1.80 of the Commission's rules, 47 C.F.R. 1.80, that Media General IS HEREBY NOTIFIED of an Apparent Liability for Forfeiture in the amount of eighty-thousand dollars ($80,000) for its apparently willful violation of Section 301 of the Communications Act of 1934, as amended, 47 U.S.C. 301. 17. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's rules, 47 C.F.R. 1.80, that within THIRTY DAYS of the release of this Notice, Media General SHALL PAY the full amount of the proposed forfeiture OR SHALL FILE a response showing why the proposed forfeiture should not be imposed or should be reduced. 18. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability for Forfeiture SHALL BE SENT by certified mail to Media General Cable of Fairfax County, Inc., 14650 Old Lee Road, Chantilly, Virginia 20151. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary