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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 FCC 96-217 In re Application of ) ) FOX TELEVISION STATIONS, ) File No. BRCT-940201KZ INC.) ) For Renewal of License of ) Station WNYW-TV, ) New York, New York ) THIRD MEMORANDUM OPINION AND ORDER Adopted: May 13, 1996 Released: June 24, 1996 By the Commission: 1. Before the Commission is a petition filed June 5, 1995 by the Metropolitan Council of NAACP Branches ("Metro NAACP") for reconsideration of Fox Television Stations, Inc., 10 FCC Rcd 8452 (1995) ("FTS I"). In that Order, we denied Metro NAACP's petition to deny the renewal of the license held by Fox Television Stations, Inc. ("FTS") to operate station WNYW-TV in New York City. FTS filed an opposition to the petition for reconsideration on June 20, 1995, and Metro NAACP replied on June 27, 1995. For the reasons stated herein, we decline to reconsider FTS I. 2. The background of this matter is described fully in FTS I, and is not repeated here. In FTS I we resolved certain issues in this proceeding after an informal investigation conducted by the Mass Media Bureau. We determined that Section 310(b)(4) of the Communications Act regulates alien equity investment as well as alien stockholding in Commission licensees. Because The News Corporation Ltd. ("News Corp."), a foreign company, has at all times since 1985 owned the vast preponderance of the equity of FTS's parent company, Twentieth Holdings Corp. ("THC"), we held that FTS's alien ownership far exceeds the 25 percent statutory benchmark, even though News Corp. owns only 24 percent of THC's voting stock. We also held that FTS had not informed the Commission of its level of alien ownership until 1994. 3. Despite our conclusions regarding the extent of FTS's alien ownership and its disclosures of that ownership, we also held that FTS had not intentionally lacked candor toward the Commission with regard to its alien ownership. We concluded that our reported cases would not necessarily have led a reasonable applicant or licensee in FTS's situation to realize that the Commission would assess equity contributions, in addition to ownership of shares of stock, in determining compliance with the alien ownership statute. We also concluded that FTS had reasonably relied on the opinion of its legal counsel advising that FTS could properly certify its compliance with Section 310(b)(4) in various renewal applications. In light of those conclusions, we found that FTS did not believe it had a duty to disclose the amount of equity capital contributed to THC by aliens and thus did not have an intent to conceal that information in an effort to deceive the Commission. 4. We found further that Rupert Murdoch, not News Corp., controls FTS, rejecting Metro NAACP's assertions to the contrary. In addition to Murdoch's 76 percent voting control, the uncontradicted evidence showed that Murdoch dominates FTS's affairs and personally decides the most important issues at FTS in his positions as major shareholder of FTS's parent company and Chairman and CEO of that company's parent. We also found relevant evidence that Murdoch exercises substantial authority at News Corp., although we did not reach the issue of whether Murdoch controls the Australian company. 5. Finally, we declined Metro NAACP's request that we deny renewal of FTS's license due to alleged improprieties concerning a book deal between HarperCollins, another News Corp. company, and Newt Gingrich, the Speaker of the House of Representatives. We determined that the allegations were not supported, and that, in any event, we would not consider non-FCC conduct in the absence of a final adjudication. 6. Metro NAACP seeks reconsideration of FTS I on a number of grounds. We address those contentions in detail below. I. Alleged Procedural Errors A. The Parties' Contentions 7. Metro NAACP asks for reconsideration due to several asserted "procedural errors." First, it claims that "the Commission considered whether Mr. Murdoch exercises de facto and de jure control of News Corp.," Pet. at 1, yet had ruled that issue to be outside of the scope of the investigation. We are thus urged to reconsider our findings on the ground that "an agency cannot render findings on an issue it has not investigated." Id. Second, Metro NAACP claims that in the course of its investigation the Bureau staff should have required the production of certain documents and deposed certain witnesses requested by Metro NAACP and that FTS I did not adequately explain why the staff did not do so. Metro NAACP is particularly concerned with documents that FTS identified but did not produce to the Bureau under claims of attorney-client and work product privileges. 8. In response, FTS states that the Commission made no findings concerning Murdoch's control of News Corp. and thus has no need to reconsider anything with respect to that issue. Opp. at 13-14. FTS also states that Metro NAACP has mischaracterized its role in the staff investigation, which in fact was not as a "party" with definite procedural rights, but one of much more limited participation. As such, it claims, Metro NAACP had no rights to any discovery, and the Bureau staff was entitled to use whatever investigatory procedures it deemed best suited to the circumstances of the case. Id. at 15-17. In fact, asserts FTS, Metro NAACP was granted substantial procedural rights, including the grant of several discovery requests. B. Discussion 9. In FTS I we did not reach the issue of Murdoch's control of News Corp. Indeed, the Order states expressly that "we believe that it is not necessary to reach the disputed issue of Murdoch's de facto control of News Corp." FTS I at 161. We explained that it was not necessary to reach that issue "because we have determined that News Corp.'s financial contribution to THC does not raise an issue of alien control even in the absence of a finding that Murdoch holds de facto control of the parent company." Id. at n.85. That decision was based on the weight of the evidence showing that Murdoch personally held de facto and de jure control of THC and FTS. In concluding that Murdoch controlled those entities, we also noted that "Murdoch wields substantial influence over News Corp. as well." FTS I at 161. Those findings were reasonable and well supported and there is accordingly no need for reconsideration of the issue. 10. We reject as well Metro NAACP's more general contention that "an agency cannot render findings on an issue it has not investigated." Pet. at 1. The Commission need not investigate matters alleged in petitions to deny, but can render findings and reject such petitions outright if they do not present substantial and material questions of fact. E.g., Citizens for Jazz on WRVR, Inc. v. FCC, 775 F.2d 392, 394 (D.C. Cir. 1985). To the extent that the Commission believes that additional information is called for, it may investigate matters further, at its discretion. Bilingual Bicultural Coalition on Mass Media, Inc. v. FCC, 595 F.2d 621, 630, 634 (D.C. Cir. 1978) (en banc). 11. We also reject Metro NAACP's contentions about discovery of FTS documents and witnesses. Metro NAACP was not a party to a hearing. We chose to conduct an informal investigation, entrusted to the Bureau staff. Metro NAACP had no "right" to any particular discovery in that context. The D.C. Circuit has made clear that when a petition to deny and other information before the Commission present allegations that, although not in themselves raising substantial and material questions of fact, nevertheless "put the FCC on notice that more information is required before the license renewal application can be granted. . . the method by which [the additional information] is to be gathered is . . . a matter for the Commission." Bilingual, 595 F.2d at 629-630; accord id. at 634. Indeed, Bilingual states with respect to such investigations that "[o]nly if the FCC . . . is unwilling or unable to conduct its own inquiry is it under any obligation to afford discovery" to a petitioner to deny. Id. Metro NAACP thus, as a legal matter, had no rights beyond "meaningful participation" in the investigation, which the D.C. Circuit defined as receiving "[t]he full report of the Commission's investigation, including all evidence it receives . . . and a . . . reasonable time allowed for response and rebuttal." Id. 12. There can be no question that the staff allowed Metro NAACP to have substantial participatory rights: it was provided with all documents produced by FTS; was allowed to attend all depositions; was allowed to suggest questions to Bureau counsel (many of which were put to the witnesses); was allowed to pose three questions of its own to each witness (which it did in most instances); was allowed to comment upon the entire record; and was allowed to suggest to the staff additional documents to request and witnesses to depose. The staff accepted some of those suggestions, for example, taking the depositions of Barry Diller and David Handelman. 13. The procedures used during the investigation accorded Metro NAACP participatory rights far beyond those required under Bilingual, where the court made clear that the very purpose of a staff investigation was to avoid "potentially burdensome discovery." Id., 595 F.2d at 634. In the FTS investigation, the Bureau in fact engaged in extensive discovery, asking for and reviewing hundreds of documents and deposing 17 witnesses, both current and former FTS and News Corp. employees and outside counsel who were involved in every aspect of the creation of FTS's ownership structure and the reporting of that structure to the Commission from 1985 until 1994. That material covered all pertinent areas of the investigation, and the staff reached the reasonable conclusion that additional material was not required. We agree with the staff's determination that the material uncovered by the investigation was adequate to enable us to reach the conclusions we reached in FTS I. We note further that, as a limited participant in the investigation, Metro NAACP was not entitled to direct it. 14. In any event, contrary to Metro NAACP's contention (Pet. at 1-2), FTS I explained why the staff declined to ask FTS to produce all of the documents and witnesses that Metro NAACP would have liked. As to witnesses, the staff "determined that those witnesses were not likely to provide information within the scope of the investigation." FTS I at 25 n.20. As to documents, the staff explained by letter that it believed an agreement between FTS and the Bureau concerning production of documents to be a "workable resolution" of discovery disputes. Letter of January 20, 1995. Nevertheless, Metro NAACP has identified certain witnesses and documents that it claims the Bureau should have required FTS to produce but erroneously did not. Pet. at 2 n.4. We will discuss each in turn. 1. Witnesses 15. Preston Padden. During part of the relevant time period, Padden was the President for Network Distribution of Fox Broadcasting Co., an FTS affiliate, and also served as Senior Vice President, Government Relations, of News Corp. In all of the voluminous documents requested and reviewed by the staff, no document indicated that Padden had any involvement with the design of FTS's ownership structure (which would not have been possible given that Padden began working for News Corp. and its affiliates in 1990. See Letter of January 17, 1995 from Mace J. Rosenstein to Charles Dziedzic at 4). His only connection to the issues under investigation was with FTS's responses to the Bureau's 1994 letters of inquiry. See FTS I at 19-22, 135-141. The evidence showed, however, that Padden's role in those letters was limited to review and comment and not to formulation of the responses. See Letter of January 17 at 4. As such the staff reasonably decided not to question Padden. Moreover, given our disposition of matters involving FTS's responses to the 1994 LOIs (see FTS I at 135-141), including our admonition that "the Commission expects greater cooperation than FTS exhibited" in its responses to the letters of inquiry, we do not believe that any additional information that would have changed our resolution of the issue could have been derived from taking Padden's deposition. 16. George Vradenburg III. Similar considerations apply to Vradenburg, who was General Counsel of Fox, Inc., one of FTS's parent companies. FTS informed us that Vradenburg began work at Fox in 1991; he therefore could not have been involved in the creation of FTS's ownership structure, its reports to the Commission about that structure, or the various memoranda and opinion letters discussed in FTS I. Letter of January 17 at 4. Rather, like Padden, Vradenburg could have been involved only with FTS's responses to the 1994 letters of inquiry. FTS reported that with respect to those letters, Vradenburg's role was, like Padden's limited to review and comment, with no direct role in formulating the response. Id. Finally, as with Padden, given the nature of the disposition of that matter in FTS I, we do not see that Vradenburg's testimony would have provided evidence that would have changed the outcome. In the circumstances, the staff properly declined to burden the discovery process further by deposing him. 17. Sanford Grushow and Jamie Kellner. FTS informed the staff that neither Grushow nor Kellner "ever was employed by FTS." They were employed by other News Corp. companies, Fox Entertainment and Fox Broadcasting Company respectively [st] and "they were responsible for matters pertaining exclusively" to that company. Letter of January 17 at 4 (emphasis in original). The staff thus was entirely reasonable in deciding not to depose them. Moreover, to the extent that Metro NAACP believed that those witnesses possessed relevant information, it was free to interview them itself (according to Metro NAACP, the two no longer work for any company controlled by Murdoch) and present its results to the staff, as the staff had expressly suggested. See Letter of January 20, 1995 from Ren‚e Licht to Laura Blackburne and David Honig at 2. 18. Trustees of Murdoch family trusts. Metro NAACP contends that the staff should have deposed the trustees of various trusts that hold the Murdoch family's interests in News Corp. stock. Those trust arrangements were not within the scope of the investigation, however, because the issue of Murdoch's control of News Corp. was itself not part of the investigation. Neither did the Commission resolve that issue in FTS I. We therefore see no error in the staff's declining to add numerous additional depositions (of witnesses located around the globe) to the investigation. 2. Documents 19. As noted in FTS I (24 n.19), FTS withheld a number of documents from production to the Bureau on grounds of work product and attorney-client privileges. Metro NAACP claims that the staff should have required production of all of those documents, for "Fox had waived any applicable privileges" that might otherwise have protected them from disclosure. Pet. at 3. FTS argues in response that, given its limited rights to participation in the inquiry under Bilingual, "Metro [NAACP] lacks any basis to challenge the staff's treatment of the privilege issue." Opp. at 18. 20. As noted above, FTS's view of Metro NAACP's participatory rights is correct. Whether to require production of any documents was a decision entrusted to the Bureau staff, not to Metro NAACP. As we explain below, we conclude that the staff's decision was reasonable. 21. To place this matter in context, we will first describe the surrounding circumstances. The Bureau had asked FTS to produce all documents responsive to twelve separate descriptive categories. See Letter of December 7, 1994 from Ren‚e Licht to Fox Television Stations, Inc. In response, FTS produced several boxes of documents; in addition, FTS identified approximately 300 additional documents that were responsive to the Bureau's requests, but that FTS claimed were protected from disclosure by work product and attorney-client privileges. See Letter of December 16, 1994 from William S. Reyner, Jr. to Ren‚e Licht and attached Log of Privileged Documents; Supplement to Log of Privileged Documents dated December 27, 1994. Thereafter, Bureau staff communicated to FTS its belief that FTS's assertions of privilege were "overinclusive." Supported by an extended discussion of the deficiencies in FTS's privilege assertions, the letter identified about 100 documents as to which, in the Bureau's view, FTS either had not justified or had waived its claims of privilege. See Letter of December 30, 1994, from Ren‚e Licht to William S. Reyner, Jr. Several days later, Metro NAACP expressed its view that FTS had waived all of its privilege claims under the "crime-fraud" exception to evidentiary privilege. See Memorandum of Law on Fox Privilege Claims, dated Jan. 4, 1995. 22. By mid-January, the staff reached an agreement with FTS concerning the privileged documents. FTS agreed to produce all of the documents that had been identified in the Bureau's December 30 Letter. FTS agreed further to allow its witnesses, including attorneys who had performed work for FTS, to testify without the constraint of assertions of privilege. The Bureau and Metro NAACP agreed that they would not invoke the production of those documents in arguing that FTS had waived its privileges. See Letter of January 13, 1995 from Ren‚e Licht to William S. Reyner, Jr. et al. As the Bureau explained a few days later, "[w]e feel that the January 13 agreement affords all parties a workable resolution of privilege issues for the purposes of this phase of the Bureau's inquiry." Letter of January 20, 1995 to Laura Blackburne and David Honig at 2. FTS subsequently produced the agreed upon documents, including the "1988 Opinion Letter" (see FTS I at 111), the "1989 Herwitz Memorandum" (see FTS I at 120), and the "1990 Brennan Memorandum" (see FTS I at 124). FTS's attorneys and employees testified as to legal advice rendered and other matters. 23. We find that there is no need to reconsider our decision in FTS I because the staff's actions with respect to the documents were reasonable. The staff challenged FTS's privilege assertions to the extent that they were unsupported or had been waived, and FTS produced all of the challenged documents. The staff further heard testimony from FTS's lawyers and employees without regard to privilege issues. The documents and testimony -- a considerable amount of material covering all pertinent matters and including the key documents in the investigation, such as the 1988 Opinion Letter -- provided a more than sufficient basis for our decision in FTS I. 24. Metro NAACP has not shown that the investigation was prejudiced by any lack of information. It has never -- neither during the investigation nor in its present petition for reconsideration -- identified any unproduced document that appears from its description in the privilege log to have been necessary to the investigation and as to which FTS's privilege claim is unsubstantiated. Rather, Metro NAACP has always claimed only that FTS had waived all of its privileges and was required to produce every document under the "crime-fraud" privilege exception. Yet as Metro NAACP's memorandum in support of its privilege argument noted, the exception applies when "a prudent person would have a reasonable basis to suspect the perpetration or attempted perpetration of a crime or fraud," and the allegedly privileged communication was made in furtherance of that conduct. Memorandum of Law at 4. The Bureau reasonably determined that such a showing was not made in this case, and instead raised specific privilege challenges to unsubstantiated or waived claims, while respecting FTS's remaining assertions of privilege, as we would expect it to. In light of the substantial amount of information gathered in the form of both documents and testimony, we are confident that the staff investigation produced a complete record of the pertinent facts, undiminished by FTS's privilege claims. At the same time, the staff was able to preserve FTS's colorable assertions of privilege. 25. Finally, had the staff chosen to undertake the blanket privilege challenge that Metro NAACP suggests it was required to, there was a substantial likelihood of litigation on that issue. Those proceedings would likely have resulted in open-ended delay as the matter was submitted for decision to a district court. See 47 U.S.C.  409(g). They would also have resulted in significant additional expenditures of agency resources. In light of our conclusion that the documents produced and the depositions conducted provided ample evidence, we find that the staff's actions were reasonable. For all of the foregoing reasons, there is no need to reconsider FTS I on this issue. II. Alleged Errors of Law and Fact 26. In addition to the purported procedural errors, Metro NAACP also asserts various errors of fact and law. Metro NAACP's central contention, from which several of its other assertions follow, is that FTS "was always on notice of the materiality of foreign corporate equity" based on Commission cases dating from 1976, and that the Commission thus incorrectly decided that a reasonable applicant would not necessarily have known to disclose the equity contributions of foreign corporations. FTS responds that Metro NAACP's reading of the cases is incorrect, that its arguments rely on an improper interpretation of materiality, and that it has not raised any arguments that we did not consider in FTS I. Opp. at i. A. Interpretation of Commission Precedent 27. With respect to our interpretation of Commission precedent, we agree with FTS that Metro NAACP has not raised any arguments that we did not consider in the earlier proceedings in this case and resolve in FTS I. That decision contains extended discussions of Commission precedent concerning alien investment in domestic licensees, and we see no reason to reconsider the conclusion that "our reported decisions at the time [of FTS's initial application in 1985] would not necessarily have led a reasonable applicant" to conclude that the Commission used relative equity contributions, as opposed to shares of stock, to determine a corporate licensee's compliance with the alien ownership benchmark set forth in 47 U.S.C.  310(b). FTS I at 82. Nevertheless, we will briefly discuss Metro NAACP's principal arguments concerning the proper interpretation of our cases. 28. First, Metro NAACP contends that the interpretation of Wilner & Scheiner, 103 F.C.C.2d 511 (1985), reconsidered in part, 1 FCC Rcd 12 (1986), set forth in FTS I is incorrect. In FTS I we held that Wilner & Scheiner did not "in any way discuss how ownership interests should be calculated for corporate applicants." FTS I at 87. Metro NAACP asserts that Wilner & Scheiner "clearly held that 'capital stock' as applied to partnerships and corporations alike, referred to 'equity or voting interests'" and thus necessarily must be read to state that relative corporate equity contributions were material to the Commission's determination of compliance with section 310(b). Pet. at 6. 29. That argument misstates the scope of our decision in Wilner & Scheiner. As we noted in FTS I, Wilner & Scheiner makes no mention of the calculation of ownership interests in corporations, as opposed to limited partnerships. To the contrary, our cases concerning corporate alien ownership had consistently used a "count the shares" approach, see FTS I at 64, and Wilner & Scheiner does not announce a change to that longstanding practice. Thus, it would have been reasonable for a corporate licensee or applicant to believe that the Commission would continue to assess alien ownership based on shares of stock owned. The reasonableness of that proposition is demonstrated by Metro NAACP's own prior recognition that "the full Commission has never explicitly stated that equity contribution must be arithmetically calculated in the context of acquiring a corporate licensee." See FTS I at 87. Metro NAACP has not acknowledged or distinguished that frank assessment of the Commission's cases, which is more accurate than its newly asserted interpretation. 30. Furthermore, Metro NAACP's argument is premised upon an incorrect understanding of our holding in FTS I concerning the nature of "material" information. We drew a distinction between "the actual state of the law" and "what a reasonable applicant could be expected to know about the law." FTS I at 82. In other words, even if information is in fact material, failing to provide it will not constitute lack of candor if an applicant cannot, based on published cases, have a reason to know it is material. That is why intent is an essential element of a lack of candor charge. We held in FTS I that FTS had in fact not provided the staff with material information, but that the failure to provide that information had not been intentional. Thus, even if Wilner & Scheiner and other cases can, in retrospect, be read to forecast that foreign equity contributions are a material consideration in some circumstances, see FTS I at 88, we cannot find that FTS lacked candor unless we find that it knew about those cases and interpreted or should have interpreted them the same way. 31. We recognized in FTS I that the logic of Wilner & Scheiner and the other cases relied on by Metro NAACP could extend to corporations -- and indeed, our holding that FTS's foreign ownership exceeds the benchmark represents just such a logical extension. But Wilner & Scheiner does not by itself compel the conclusion that corporate equity is material, even if it supports such a determination. The reading of Wilner & Scheiner and other cases set forth by Metro NAACP may be accurate in retrospect, but that does not mean that the cases would necessarily have led a licensee to the conclusion that we ultimately reached in FTS I concerning the materiality of corporate equity. We thus reaffirm our finding that a reasonable applicant in 1985 would not necessarily have realized, based on Wilner & Scheiner, that equity capital contributions were material to the Commission's determination of a corporate applicant's compliance with section 310(b). 32. We likewise reject Metro NAACP's argument concerning the Wilner & Scheiner reconsideration order. Like the initial order, nothing in the Reconsideration Order indicates that the Commission had fundamentally changed the manner in which it determined corporate benchmark compliance -- especially not for corporations whose structure was based on voting stock and had been designed to comply with the traditional "count the shares" approach. FTS I at 113-114. Indeed, Metro NAACP's own description of the Reconsideration Order states that it defined ownership interests "in a limited partnership context." Pet. at 8; see Reconsideration Order, 1 FCC Rcd at 14 (noting that Wilner & Scheiner "define[d] ownership interests in a limited partnership in terms of the equity contributions of the limited partners"). We cannot find based on anything in the Reconsideration Order that FTS deliberately misled us concerning its alien ownership. Once again, although the Reconsideration Order, like Wilner & Scheiner, can be viewed as part of a trend toward our considering equity contributions generally, it in no way purported to represent a statement of the Commission's policy as applied to corporate applicants and therefore does not, without more, justify a finding of intentional lack of candor. 33. We again reject Metro NAACP's argument that FTS knew of the Mass Media Bureau's letter ruling in American Colonial, which indicated that, at least at the staff level, corporate equity contributions could be material to determining compliance with Section 310(b). That argument rests now, as it did before, entirely on speculation that is contradicted by the unrebutted testimony of numerous witnesses. See FTS I at 85, 87 and n.51. Furthermore, Metro NAACP has presented no new arguments concerning FTS's intent to mislead the Commission after American Colonial was relied on by Michael Gardner in the 1988 Opinion Letter. Pet. at 12. As we held in FTS I, even if FTS recognized at some point in 1988 that alien equity might be material, FTS lacked the intent to mislead us by withholding that information because it reasonably relied on its attorney's advice that it could in good faith certify compliance with Section 310(b)(4). FTS I at 116. 34. We also reject again the argument that PrimeMedia Broadcasting, Inc., 3 FCC Rcd 4293 (1988), put reasonable licensees on notice that the Commission would calculate corporate compliance with Section 310(b) based on equity contributions. Metro NAACP has offered no new argument that causes us to question our earlier conclusion that "there is no indication in the opinion that we would in the future calculate benchmark ownership levels in corporations in any way other than counting the shares held by foreigners." FTS I at 115. Indeed, the holding of PrimeMedia is fully consistent with a count-the-shares approach. We thus cannot conclude, based on anything in PrimeMedia, that FTS intentionally misled the Commission by failing to reveal its relative equity capital contributions. 35. Finally, Metro NAACP argues that because, as we recognized in FTS I, the 1992 Univision case was the "first published decision to examine alien equity holdings in order to evaluate corporate compliance with Section 310(b)," FTS violated its duty of candor for applications submitted after 1992. See FTS I at 68 (discussing Univision Holdings, Inc., 7 FCC Rcd 6672, 6673 n.6 (1992), recon. denied, 8 FCC Rcd 3931 (1993)). We do not agree. Although, as we recognized earlier, Univision "examined" capital contributions, it did so in passing in a footnote, and it surely did not announce a shift in Commission policy such that we can charge FTS with deliberate concealment of information based on the case. (That is so even if Univision represents another step toward our eventual announcement in FTS I that we would thenceforth scrutinize all capital contributions in determining alien ownership compliance.) Indeed, prior to our decision in FTS I, which addressed the Univision footnote, Metro NAACP itself was apparently unaware of the existence of the footnote, despite having referred to other parts of Univision several times in its arguments to the Commission. Moreover, as FTS points out (Opp. at 8), Univision's analysis addresses alien capital contributions represented by non-voting stock, as opposed to the FTS's corporate structure, which has only voting stock. Thus, we cannot say that FTS would necessarily have known based on Univision that it had the duty to report its foreign capital contribution, and we cannot conclude that FTS intended to mislead us by not reporting that data. 36. Several of Metro NAACP's other arguments depend on the assumption that FTS knew all along that equity capital was material to a determination of compliance with the alien ownership law, and our finding to the contrary is fatal to those arguments. We therefore dispose of the claim that FTS's witnesses lied because they testified to their belief that equity capital was immaterial. Pet. at 11-12. For the same reason, we reject the contention that the totality of the evidence demonstrates something that the individual incidents do not. Pet. at 15-20. Not only is that argument premised on the faulty assumption about materiality, but we have already assessed the totality of the circumstances and determined that it does not present a substantial question of fact concerning candor. FTS I at 134. B. Other Factual Allegations 37. Metro NAACP raises a number of other alleged factual errors. First, it claims that FTS "always knew that its principal defense was a sham." Pet. at 9. Specifically, Metro NAACP claims that FTS's reorganization plan (described in FTS II at 6) shows that in 1985 FTS "was well aware that News Corp.'s 99% equity interest in THC would not have been evident just from the fact that News Corp. was putting up the cash and would have the economic benefits and risk." Pet. at 10 (emphasis in original). According to Metro NAACP, the reorganization (which reduced News Corp.'s indirect capital contribution to THC) demonstrates that the Commission in 1985 could have understood "that News Corp.'s cash contribution could have taken the form of debt." Id. Thus, Metro NAACP argues, FTS's defense that it had disclosed full information about its structure at all times since 1985 was a "sham." FTS responds that the reorganization plan shows only that, had News Corp. known in 1985 that the form of its contribution to THC was important to the Commission, it would have provided the funds as debt rather than as equity. 38. Metro NAACP's argument presents no reason to reconsider our earlier decision. We have already held that FTS did not disclose the full extent of its alien ownership -- and thus rejected what Metro NAACP calls FTS's "principal defense." See FTS I at 77- 81. The key question therefore became whether that lack of disclosure was the result of an intent to mislead the Commission. We decided that it was not, because our reported cases would not necessarily have led FTS to know that relative equity capital contributions were material to compliance with Section 310(b). In those circumstances, it makes no difference whether FTS knew that the Commission could have understood the 1985 Application to state that News Corp.'s contribution would take the form of debt rather than equity. 39. Moreover, in FTS II we concluded that in the context of THC's specific corporate structure, benchmark compliance could not be achieved even if News Corp.'s funding of THC took the form of debt. In so concluding, we took into account the "economic realities" of the relationship between News Corp. and THC, including the facts that News Corp. would supply virtually all of THC's funding and would be entitled to substantially all of its profits and losses. FTS II at 15-17. FTS had disclosed certain factors bearing on the realities of the relationship between News Corp. and THC. As we concluded in FTS I, therefore, FTS's disclosures revealed that News Corp.'s financial participation "plainly gave it benefits typically associated with equity holdings." FTS I at 92. We thus concluded that FTS's failure to be explicit regarding debt versus equity did not reflect an intent to avoid scrutiny of News Corp.'s financial stake in FTS. We reaffirm that conclusion here. 40. We also disagree with Metro NAACP's assertion (Pet. at 10- 11) that FTS had a motive to conceal the facts of its ownership in 1985 (contrary to our finding in FTS I of no motive, see id., 91) due to tax consequences it would have faced in 1995 had the Commission ordered FTS to restructure itself in order to comply with the alien ownership benchmark. We do not see how the tax consequences of a potential restructuring provided a motive for failing to disclose completely the corporate equity structure ten years earlier. Moreover, Metro NAACP's argument depends on the assumption that FTS's capital gains resulted from a structure that did not comply with Section 310(b). Those gains, however, are presumably the result of FTS's success as a television competitor and not of its corporate structure. 41. Metro NAACP's final contention is that the Commission was obligated to impose a forfeiture due to what we determined in FTS I was an inadequate response to the Mass Media Bureau's March 1994 letter of inquiry. We disagree. We continue to believe that FTS's response to the LOI was inadequate, and we do not condone FTS's behavior. We nevertheless feel that a forfeiture is not necessary in the circumstances of the case. The authorities cited by Metro NAACP are not to the contrary. Merrimack Valley Broadcasting, Inc., 92 F.C.C.2d 506, 520 (Rev. Bd. 1982), reconsidered in part, 99 F.C.C.2d 680 (1983), did not involve a forfeiture at all, but a demerit in a comparative hearing, which was later reversed. Albany Radio, Inc., 97 F.C.C.2d 519, 525 (1984), involved a licensee whose application was designated for hearing, and noted the Commission's policy at the time that every designation order contain a notice of apparent liability in order to "maintain the fullest possible flexibility of action." The case thus did not impose a forfeiture. The Commission has broad discretion to decide whether to impose a forfeiture, and our decision not to impose one here is well within that discretion. See Policy Statement -- Standards for Assessing Forfeitures, 8 FCC Rcd 6215, 6216 n.1 (FCC "retain[s] discretion to issue . . . no forfeiture at all"), rev'd on other grounds sub nom, U.S. Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 1994), on remand, 10 FCC Rcd 2945 (1995) (retaining same discretion); see also Heckler v. Chaney, 470 U.S. 821, 831 (1985) (discussing agencies' broad discretion in enforcement matters). ORDERING CLAUSE 42. For the foregoing reasons, IT IS ORDERED that the Petition for Reconsideration filed by the Metropolitan Council of NAACP Branches on June 5, 1995, is DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary