******************************************************** 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 ) ) Taco Time ) NAL/Acct. No. 815DV0002 1641 Elk Street ) Rock Springs, WY 82901 ) FORFEITURE ORDER Adopted: February 11, 1999 Released: February 16, 1999 By the Director, Legal Services Group Compliance and Information Bureau: 1. Before the Compliance and Information Bureau ("CIB" or "Bureau") is a Notice of Apparent Liability ("NAL") for monetary forfeiture issued on June 19, 1998, to Taco Time Restaurant ("Taco Time"), and the July 8, 1998 response thereto filed by Lee Staley on behalf of Taco Time. The NAL proposed imposition of a forfeiture against Taco Time in the amount of $11,000 pursuant to Section 503(b) of the Communications Act of 1934, as amended ("the Act"), 47 U.S.C.  503(b), and Section 1.80 of the Commission's Rules ("the Rules"), 47 C.F.R.  1.80, for willful and repeated violations of Section 301 of the Act, 47 U.S.C.  301. For the reasons stated below, we affirm the $11,000 forfeiture amount. BACKGROUND 2. On March 31, 1998, agent Jon Sprague of CIB's Denver, Colorado Field Office investigated a complaint in Rock Springs, Wyoming of co-channel interference resulting from Taco Time's radio transmissions on Private Land Mobile Radio Service frequency 154.54 MHz. A search of the Commission's records revealed that Taco Time did not hold any licenses authorizing radio transmissions on frequency 154.54 MHz or any other frequency. On April 10, 1998, FCC agent Sprague monitored frequency 154.54 MHz while in Rock Springs, identified transmissions by Taco Time on that frequency, and proceeded with an inspection of the site. Employees of Taco Time were unable to produce a valid FCC authorization for their use of 154.54 MHz, or for any other frequency. Taco Time was warned verbally to cease all unlicensed radio operations, instructed to obtain the appropriate FCC license before recommencing radio activities, and informed that a letter would be forthcoming from the Denver Field Office concerning the unlicensed operation. During the inspection, the Taco Time staff posted a sign at the outside menu ordering board indicating that customers would need to drive to the window to order. 3. On May 18, 1998, the Denver Field Office sent Taco Time a letter, via certified mail, return receipt requested, which informed Taco Time that the unlicensed operation on frequency 154.50 MHz violated Section 301 of the Act. The letter, which requested a written response by May 26, 1998, also instructed Taco Time to discontinue the unlicensed operation immediately. The return receipt notification indicated that Taco Time received the May 18 letter, on May 20, 1998. No response to the letter was ever received by the Denver Field Office. 4. Also on May 18, Rebecca Willman of the Denver Field Office visited Taco Time, but found that the sign previously posted outside the menu ordering board had been removed. Monitoring conducted that same day revealed that Taco Time was again operating on a 154 MHz frequency, but the exact frequency in use could not be determined due to the brevity of the transmissions. Further monitoring on May 22, 1998, found that Taco Time was conducting frequent radio transmissions on frequency 154.51 MHz. Upon discovering the frequency of the transmissions, FCC agent Willman inspected the site, and again found that the Taco Time employees were unable to produce a valid FCC license authorizing such radio transmissions. 5. During the inspection on May 22, 1998, the Taco Time employees informed agent Willman that Eldon Staley was an owner of Taco Time. Mr. Staley was contacted by telephone. Mr. Staley asked agent Willman whether additional interference complaints had been lodged with the FCC since Taco Time had changed frequencies. Agent Willman informed Mr. Staley that the investigation of Taco Time was not complaint driven, but rather, it was based on a known violation of the Act. Upon being informed of the unlicensed radio operations, Eldon Staley directed further inquiries to his son, Lee Staley. 6. On May 26, 1998, agent Willman contacted Lee Staley about the unlicensed radio use. Lee Staley admitted that Taco Time continued to operate the radio system, but was unable to provide any evidence of authority for its operation on either 154.54 MHz or 154.51 MHz. 7. Based on the above, on June 19, 1998, the Denver Field Office issued the subject NAL in the amount of $11,000 for repeated violations of Section 301 of the Act. DISCUSSION 8. A written response to the NAL, dated July 8, 1998, was received by the Bureau on July 13, 1998. The response claims that Taco Time has "continually tried to make a good faith effort to obtain the necessary license," but also admits that it used the radio system without a license even after it was warned not to do so. Taco Time claims to have subsequently obtained an FCC Form 572, Temporary Permit to Operate a Part 90 Radio Station, on May 30, 1998. It apologizes for its conduct, stating that it did not realize the seriousness of operating a wireless communication system that is supposed to transmit at a distance of 500 feet, and asserts that an $11,000 fine would be an overwhelming hardship for the business. In support of the hardship claim, Taco Time submits what appears to be pages from a statement of revenue and expenses. 9. Taco Time continued to operate after receiving a verbal warning to cease operation on April 10, 1998, and after receiving a written warning on May 20, 1998. Instead of ceasing operations as requested, Taco Time simply changed its radio operation to another frequency for which it also had no license, despite repeated warnings that the frequencies must be licensed before use. These violations were, therefore, willful under the Act because they were not caused by accident or mistake. Furthermore, Taco Time did not obtain FCC Form 572 until May 30, 1998, after the violations which form the basis for the NAL had occurred, and after Taco Time had been warned of its violation of the Act but continued to operate the system. Remedial action to correct a violation, although commendable, does not nullify a forfeiture penalty. See Station KGVL, Inc., 42 FCC 2d 258, 259 (1993). 10. With respect to the financial information apparently submitted in support of Taco Time's claim that the forfeiture would impose a hardship, we note that there is no verification of the authenticity of this submission, no indication of the source or scope of the financial information presented therein, and no evidence that the figures were prepared in accordance with generally accepted accounting procedures. The NAL clearly states, at footnote two, that a claim of inability to pay should be supported by tax returns or other financial statements prepared under generally acceptable accounting procedures for the most recent three year period. Taco Time has provided no such documentation, nor has it offered any explanation of the documents that were submitted which would allow the Commission to assess the validity of its hardship claim. See, e.g., PJB Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089 (1992) (a licensee's gross revenues are generally the best indicator of its ability to pay a forfeiture); In the Matter of Barry A. Stevenson, 12 FCC Rcd 1976, 1977 (1997) (Commission requires petitioners claiming inability to pay forfeitures to provide financial statements prepared in accordance with generally accepted accounting procedures for the most recent three years). 11. The Commission derives its forfeiture authority from Section 503 of the Act. In assessing the forfeiture amount in this case, the Denver Field Office followed Section 503 of the Act, Section 1.80 of the Rules, and The Commission's Forfeiture Policy Statement and Amendment of Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines, 12 FCC Rcd 17087 (1997), recon. pending ("Policy Statement"). In assessing forfeitures, Section 503(b) of the Act requires that the Commission 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 other such matters as justice may require. 47 U.S.C.  503(b)(2)(D). 12. Given Taco Time's continued operation of the radio system without a license after being warned that such use was a violation of the Act, its attempt to circumvent the violation by changing frequencies after the first warning instead of ceasing operation until it obtained a valid authorization, and the inadequate financial records submitted in support of its hardship claim, we find no basis in the record to support reduction of the amount of the forfeiture assessed against Taco Time. 13. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the Act, Section 1.80 of the Rules, and the Policy Statement, Taco Time Restaurant IS LIABLE FOR A MONETARY FORFEITURE in the amount of eleven thousand dollars ($11,000) for repeated violations of Section 301 of the Act. 14. IT IS FURTHER ORDERED that, pursuant to Section 1.80(f) of the Rules, Taco Time Restaurant shall, within thirty (30) days of the release of this Forfeiture Order, pay the full amount of the forfeiture. Forfeitures shall be paid by check, credit card, or money order payable to the Federal Communications Commission. The remittance should be marked "NAL/Acct. No. 815DV0002" and mailed to the following address: Federal Communications Commission Post Office Box 73482 Chicago, IL 60673-7482 Petitions for reconsideration pursuant to Section 1.106 of the Rules, 47 C.F.R.  1.106, or applications for review pursuant to Section 1.115 of the Rules, 47 C.F.R. 1.115, should be sent to: Office of the Secretary Federal Communications Commission 445 12th Street, S.W. Washington, D.C. 20554 ATTN: Compliance and Information Bureau Mail Stop 1500E3-ADJ Forfeiture penalties not paid within 30 days will be referred to the U.S. Attorney for recovery in a civil suit. See 47 U.S.C.  504(a). 15. IT IS FURTHER ORDERED that a copy of this Order shall be sent certified mail, return receipt requested, to Taco Time, 1641 Elk Street, Rock Springs, WY 82901. FEDERAL COMMUNICATIONS COMMISSION Ricardo M. Durham Director, Legal Services Group Compliance and Information Bureau