NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file how2ftp. File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** $\\ Lotus Communications, Inc. (KFSD(FM), San Diego, CA), MO&O & FO, FCC 96-6 ||$ $\ 300.503(b), Forfeitures |$ $\ 001.80, Forfeiture Proceedings \$ $\ 001.106, Petitions for Reconsideration \$ FCC 96-6 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Application of ) ) Lotus Communications, Inc. ) File No. BRH-900801WE ) For renewal of license for ) Station KFSD(FM) ) San Diego, California ) MEMORANDUM OPINION AND ORDER AND FORFEITURE ORDER Adopted: January 18, 1996 Released: March 20, 1996 By the Commission: Commissioner Quello concurring; Commissioner Barrett concurring and issuing a statement. 1. The Commission has before it: (1) our decision in Lotus Communications, Inc., 9 FCC Rcd 2117 (1994) ("Lotus"); (2) a Petition for Reconsideration of that decision filed by the California State Conference of Branches of the NAACP (hereinafter "NAACP"); and (3) a "Consolidated Petition for Reconsideration" filed by Lotus Communications, Inc. ("LCI" or "licensee"). For the reasons that follow, we dismiss the NAACP's petition. However, we grant the licensee's petition to the extent indicated herein and deny it in all other respects. Specifically, we recalculate the forfeiture and reduce it to $15,000. NAACP's Petition for Reconsideration 2. In Lotus, we concluded that the NAACP had not demonstrated that it was a "party in interest" as that term is used in Section 309(d)(1) of the Communications Act of 1934, as amended, 47 U.S.C.  309(d)(1), with respect to the renewal application for Station KFSD(FM) because the declarations filed with its petition to deny failed to establish the NAACP's standing. Specifically, the NAACP failed to provide a declaration from anyone who claimed to be a listener to or service area resident of the station. 3. Section 405 of the Communications Act of 1934, as amended, 47 U.S.C.  405, states that any party to an order, decision, report or action by the Commission or any other person aggrieved or whose interests are adversely affected, may petition for reconsideration. See also, Committee for Community Access v. FCC, 737 F.2d 74 (D.C. Cir. 1984) ("Community Access"); 47 C.F.R.  1.106. To qualify as a party, a petitioner for reconsideration must have filed a valid petition to deny against the application whose grant the petitioner now seeks to have reconsidered. Gulfcoast Broadcasting, Inc. (WMMK-FM), 8 FCC Rcd 483 (1993) ("Gulfcoast"); Montgomery County Broadcasting Corp., 65 FCC 2d 876 (1977) ("Montgomery"). If the petition for reconsideration is filed by one who is not a "party to the proceeding, it shall state with particularity the manner in which the person's interests are adversely affected by the action taken, and shall show good reason why it was not possible for him to participate in the earlier stages of the proceeding." 47 C.F.R.  1.106(b)(1); see Community Access, 737 F.2d at 84. 4. The NAACP's petition to deny the license renewal application for Station KFSD(FM) was not supported by a declaration as required by 47 U.S.C.  309(d)(1). See also, 47 C.F.R.  73.3584. Under the circumstances, we properly dismissed the NAACP's petition. See Gulfcoast, 8 FCC Rcd at 483; Broadcast Stations Serving the State of Florida, 3 FCC Rcd 1930 (1988). As an informal objector, the NAACP lacks standing to bring the instant petition because it is not a "party to the proceeding" within the meaning of Section 405 of the Communications Act and Section 1.106 of the Commission's Rules. Moreover, the NAACP's petition for reconsideration has not demonstrated that its interests were adversely affected by our decision in Lotus, nor has it demonstrated that it was not possible for it to participate as a petitioner to deny in the earlier stages of the proceeding. Hence, we find that the NAACP has not complied with the procedural requirements of Section 1.106. See Montgomery, 65 FCC 2d at 877; 47 C.F.R.  1.106. Therefore, we dismiss the NAACP's petition for reconsideration. LCI's Petition for Reconsideration 5. In Lotus, we found that although Station KFSD contacted a wide variety of recruitment sources bi-annually, it was unclear which of the recruitment sources were contacted whenever jobs were filled. We also found that the station could not document the number of applicants it received for each job filled, nor could it identify the race of the persons interviewed. The station's applicants and hires included minorities, and the station apparently employed one or more minorities throughout the license term on a full-time staff that ranged between 14 and 16 employees. 6. We concluded that no substantial and material question of fact existed in that LCI had recruited, hired and employed minorities and there was no evidence of employment discrimination. However, we also concluded that the station's recruitment efforts were apparently deficient because minorities were absent from most of the station's applicant and interview pools. Moreover, it appeared that the station had not consistently engaged in efforts to attract minorities, particularly Hispanics, and that it had not conducted meaningful self- assessment of its EEO program. Referring to the guidelines set forth in Standards for Assessing Forfeitures for Violations of EEO Rules, 9 FCC Rcd 929 (1994) ("EEO Policy Statement") (petitions for reconsideration and clarification pending), we concluded that the licensee's EEO rule violations warranted imposition of a forfeiture and reporting conditions. We therefore renewed the KFSD(FM) license only for a short-term and issued a Notice of Apparent Liability ("NAL") for $18,750. 7. In seeking reconsideration, LCI argues that its EEO violations are solely of a record- keeping nature and that the penalties imposed pursuant to the EEO Policy Statement were invalid because that statement should have been put out for notice and comment and because the penalties referenced therein were applied retroactively. LCI also submits that its derelictions are less egregious than those of the licensee in Eastern Carolina Broadcasting Company, Inc., 6 FCC Rcd 6154 (1991) ("Eastern Carolina"). There, we affirmed our grant of renewal for a short-term subject to reporting conditions (see 4 FCC Rcd 1621 (1989)) and issued a $7,000 Forfeiture Order to a licensee whose stations were located in an area that had a 30.4% minority labor force, and that had made only sporadic efforts to notify potential sources of Black applicants, kept incomplete EEO records, and had not hired any minorities during a three year period despite a substantial number of opportunities and despite a decline in the number of minority employees at the stations. LCI submits that, because its record is better than the record sanctioned in Eastern Carolina, the Commission should rescind or substantially reduce the NAL. 8. Reconsideration is appropriate only where the petitioner shows either a material error or omission in the original order or raises additional facts not known or not existing until after the petitioner's last opportunity to present such matters. See WWIZ, Inc., 37 FCC 685, 686 (1964), aff'd sub nom. Lorain Journal Co. v. FCC, 351 F.2d 824 (D.C. Cir. 1965), cert. denied, 383 U.S. 967 (1966) (WWIZ); 47 C.F.R.  1.106(c). Applying this standard, we conclude that reconsideration is warranted with respect to the amount of the forfeiture. 9. Last year, in adopting the EEO Policy Statement, we proposed the use of non-binding guidelines for assessing forfeitures for violations of our broadcast EEO rule. We had issued general forfeiture guidelines to identify those situations that could lead to a forfeiture and to identify criteria that might be used to increase or decrease the base amount of the forfeiture and that might result in grant of renewal for less than a full term. Policy Statement, Standards for Assessing Forfeitures, 6 FCC Rcd 4695 (1991), recon. denied, 7 FCC Rcd 5339, revised, 8 FCC Rcd 6215 (1993) ("Policy Statement"). The issuance of the EEO Policy Statement resulted from the deletion of the broadcast EEO violation category from our general forfeiture guidelines. See Policy Statement, 8 FCC Rcd at 6215 n. 1. The EEO Policy Statement did not modify any part of the EEO rule. 10. In United States Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 1994) ("USTA"), the court set aside our general forfeiture guidelines. The USTA decision concluded that the forfeiture schedule should have been put out for comment under the Administrative Procedure Act. Following the USTA decision, we have received requests to withdraw the EEO Policy Statement until it is likewise made available to the public for comment. See, e.g., Petition for Declaratory Ruling by Eagle Radio, Inc. (filed August 11, 1994); Letter from Henry L. Baumann to William E. Kennard, July 13, 1994. In recent orders, we have stated that we would respond to these concerns in a separate order. See, e.g., Stauffer Communications, Inc., 10 FCC Rcd 5060, 5061 (1995); GAF Broadcasting Company, Inc., 10 FCC Rcd 10760 (1995). In the meantime, we will utilize our pre-January 1994 process of assessing forfeitures. Consistent with that approach, we have decided that we must recalculate the forfeiture imposed on LCI. 11. In determining a forfeiture, we have looked to case precedent, taking into consideration the relevant statutory factors in Section 503(b)(2) of the Communications Act, including the nature, circumstances, extent and gravity of the violations, and LCI's record of compliance with our rules. In our evaluation, we consider the station's size, number of hiring opportunities, MSA size, recruitment patterns, applicant and interview pools, assessment and record-keeping. E. g., Stauffer Communications, Inc., 10 FCC Rcd at 5061. After such consideration, we conclude that a forfeiture of $15,000 is appropriate. 12. In reaching the specified amount, we have determined that LCI's record is similar to that of Station WZZR(FM), Stuart, Florida (see CRB of Florida, Inc., 6 FCC Rcd 2303 (1991)), where we granted renewal subject to reporting conditions and issued a Notice of Apparent Liability for forfeiture for $7,500. In 1988, Station WZZR(FM) had 20 full-time employees. The MSA in which it is located had 18.5% minorities in the labor force. During the period under review (June 30, 1987 to February 1, 1989), the station filled 18 jobs. For all but two of the jobs, the licensee had no records to substantiate that it had conducted any recruitment, and it had no records regarding applicant and interview pools. There was no indication that any self-assessment had occurred prior to the filing of a petition to deny. The station hired no minorities and had only one minority on its staff. We concluded that the licensee had failed to meaningfully self-assess its EEO program and had failed to alter its recruitment efforts even though the sources contacted had produced no minority referrals. In determining the amount of the forfeiture, the Commission took into account that the licensee had held the license for only one and a half years. 13. The forfeiture for Station WZZR(FM), although issued in 1991, was based on our former forfeiture authority, which could "not exceed $2,000 for each violation or each day of a continuing violation, except that the amount assessed for any continuing violation could not exceed a total of $20,000." In 1989, Congress substantially increased the dollar amounts of our forfeiture authority. Pub. L. No. 101-239, 103 Stat. 2131. Pursuant to Section 503(b)(2), the forfeiture penalty assessed against a broadcaster may now "not exceed $25,000 for each violation or each day of a continuing violation, except that the amount assessed for any continuing violation shall not exceed a total of $250,000 for any single act or failure to act." See 47 U.S.C.  503(b)(2). Station KFSD(FM)'s EEO violations continued at least until June 30, 1990. See Lotus, 9 FCC Rcd at 2118. 14. Station KFSD(FM) had between 14 to 16 full-time employees and is located in an MSA which had 22.6% minorities in the labor force. During the period under review, the station had 15 hires. Although the station made bi-annual contacts with various recruitment sources which resulted in minority referrals and application from minorities, it could not establish that it contacted recruitment sources for each vacancy, and it did not know (other than the person hired) who was in any of the station's applicant or interview pools. There was also no indication that the licensee had conducted meaningful self-assessment. Although the two minorities hired were Hispanic, it appeared that, for the majority of the license term, the station did not engage consistently in efforts to recruit or employ Hispanics, the dominant minority in the San Diego area. Lotus, 9 FCC Rcd at 2119. 15. The stations (WZZR(FM) and KFSD(FM)) are comparable in size and in the number of hiring opportunities, and both are located in areas where minorities constitute roughly 20% of the local labor force. Although Station KFSD(FM) apparently made some recruitment efforts which resulted in applications from qualified minority candidates while Station WZZR(FM) made virtually none, LCI could not establish that the efforts of KFSD(FM) were related to any particular job opening. Neither station maintained adequate EEO records, and neither conducted any meaningful self-assessment of its EEO program. Given the facts of this case, broadcasters' familiarity with our EEO Rule, as well as our expanded forfeiture authority, we believe the appropriate forfeiture is $15,000. Moreover, the reporting conditions imposed in Lotus remain unaffected. 16. Accordingly, IT IS ORDERED, that the petition for reconsideration filed by the NAACP IS DISMISSED. 17. IT IS FURTHER ORDERED, that LCI's Petition for Reconsideration IS GRANTED TO THE EXTENT HEREIN AND IS OTHERWISE DENIED. 18. IT IS FURTHER ORDERED, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. Section 503(b), that LCI FORFEIT to the United States the sum of fifteen thousand dollars ($15,000) for the willful and repeated violations of Section 73.2080 of the Commission's Rules, 47 C.F.R. Section 73.2080. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. 19. IT IS FURTHER ORDERED, that the Mass Media Bureau send by Certified Mail-- Return Receipt Requested, copies of this Memorandum Opinion and Order and Forfeiture Order to the NAACP and to LCI. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary