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 pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Applications of ) ) San Luis Obispo Limited Partnership ) File Nos. BR-900731A7 ) BRH-900731ZH For renewal of license for ) Stations KKCB(AM)/KSLY-FM ) San Luis Obispo, California ) MEMORANDUM OPINION AND ORDER AND FORFEITURE ORDER Adopted: August 12, 1996 Released: August 15, 1996 By the Commission: 1. The Commission has before it: (1) its Memorandum Opinion and Order and Notice of Apparent Liability in San Luis Obispo Ltd., 9 FCC Rcd 894 (1994) ("SLO"); (2) a Petition for Reconsideration of that decision filed by the California State Conference of Branches of the NAACP (hereinafter "NAACP"); and (3) a "Petition for Reconsideration and Response to Notice of Apparent Liability" ("NAL") filed by San Luis Obispo Limited Partnership ("licensee"). For the reasons that follow, we dismiss the NAACP's petition for reconsideration. We also dismiss, as moot, the licensee's petition for reconsideration with respect to the short-term renewal, waive the reporting conditions, and grant its response to the NAL to the extent indicated herein and deny it in all other respects. We thus recalculate the forfeiture and reduce it from $25,000 to $12,000. NAACP's Petition for Reconsideration 2. In SLO, 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 applications for KKCB(AM)/KSLY-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 stations. Thus, the NAACP's petition to deny was dismissed and treated as an informal objection. 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. Because the NAACP's petition to deny was not supported by a declaration as required by 47 U.S.C.  309(d)(1), we properly dismissed it. 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 SLO, 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. Licensee's Petition for Reconsideration and Response to NAL 5. In SLO, we concluded that a hearing was not required because no substantial and material question of fact existed. The licensee had recruited, hired and employed minorities and there was no evidence of employment discrimination. We found, however, that KKCB(AM)/KSLY-FM's recruitment efforts were deficient and that the stations failed to conduct meaningful self- assessment of their EEO program. Accordingly, we granted short-term license renewals for KKCB(AM) and KSLY-FM and imposed reporting conditions upon the licensee to monitor future compliance with the Commission's Equal Employment Opportunity ("EEO") rule. Further, relying upon the guidelines set forth in Standards for Assessing Forfeitures for Violations of EEO Rules, 9 FCC Rcd 929 (1994) ("EEO Policy Statement"), we issued an NAL in the amount of $25,000. 6. In seeking rescission or mitigation of the forfeiture amount in the NAL, the licensee argues that its EEO violations are predominantly of a record-keeping nature and that the penalties imposed pursuant to the EEO Policy Statement were improperly applied retroactively. Although acknowledging its failure to document its practices, the licensee disputes our characterization of its EEO program as deficient in view of its actual minority hirings during the license period. The licensee contends that its minority hirings demonstrate that its EEO program was successful and undeserving of sanctions. The licensee argues, however, that if we decide that a forfeiture remains appropriate, we should reduce or rescind the amount because of its financial condition. Specifically, the licensee states that it incurred a substantial loss on the sale of KSLY-FM in 1994 and that its tax returns for 1990, 1991, and 1992, demonstrate its poor financial condition. 7. We find that reduction of the forfeiture amount is warranted. Furthermore, in its application for renewal of license, the licensee indicates that KKCB(AM)'s full-time staff now includes fewer than five full-time employees. Thus, we also determine that a waiver of the reporting conditions is warranted. 8. 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. See Streamlining Broadcast EEO Rule and Policies, 11 FCC Rcd 5154 (1996). 9. 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 Streamlining Broadcast EEO Rule and Policies, we vacated the EEO Policy Statement and advised licensees that we would follow our recent practice of making forfeiture decisions by relying on case precedent to resolve the decisional case. 10. In determining a forfeiture, we take 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 the licensee's record of compliance with our rules. In our evaluation, we consider the station's size, number of hiring opportunities, composition of the local labor force, recruitment patterns, applicant and interview pools, assessment and record-keeping. E. g., Stauffer Communications, Inc., 10 FCC Rcd 5060, 5061. After such consideration, we conclude that a forfeiture of $12,000 is appropriate. 11. We find that the record in the instant case is similar to the record involving the licensee of Station KGWN-TV, Cheyenne, Wyoming. See Stauffer Communications, Inc., 10 FCC Rcd 5060 (1995). There, we granted renewal subject to reporting conditions, and issued a $12,000 NAL. During the 1988-1993 license term, KGWN-TV had between 42 and 45 full-time employees. The local labor force included 13% minorities. From April 1, 1990 to April 1, 1993, the licensee had 26 full-time hiring opportunities. The licensee was unable to verify recruitment for 11 of the station's vacancies and apparently attracted minority applicants for only two of its openings. The licensee did not maintain sufficient records to show the results of its recruitment contacts and consequently could not adequately self-assess its EEO program as required by the Commission's EEO rule. 12. During the 1983-1990 license term, Stations KKCB(AM)/KSLY-FM had a full-time work force of between 18 and 22 full-time employees. The San Luis Obispo labor force included 12.7% minorities. The licensee verified that it recruited from general recruitment sources for 52 sales and office positions but could not verify its specific recruitment efforts concerning the remaining 20 positions. The licensee was also unable to provide documentation of the composition of its applicant and interview pools for any particular opening. The licensee could show that minorities were in 13 of the 72 applicant and interview pools. However, this information was derived from the stations' hiring of 13 minorities and not as a result of the maintenance of adequate employment and recruitment records as contemplated by the EEO rule self-assessment requirement. See Section 73.2080(c)(5) of the Commission's Rules. These essential facts are undisputed in the licensee's petition for reconsideration. 13. The Cheyenne and San Luis Obispo MSA minority labor forces are comparable -- Cheyenne's is 13% and San Luis Obispo's is 12.7%. Both licensees' lacked specific information about applicants, interviewees, and recruitment contacts, information the Commission believes better enables licensees to self-assess the effectiveness of their recruitment efforts. Although the Cheyenne station was larger, the San Luis Obispo stations had more hiring opportunities. Thus, on balance, we believe that the same forfeiture as that imposed on the Cheyenne station is warranted, that is, $12,000. 14. We are not persuaded that the fine should be rescinded or reduced below $12,000 due to the licensee's financial condition. A claim of financial hardship can be a mitigating factor to be weighed against the imposition of a forfeiture. 47 U.S.C. Section 504 (b)(2)(D). However, the information submitted by the licensee in response to the NAL was, at the time of submission, out of date and inadequate. 15. First, the tax returns for 1990-1992 involve financial information for a period of time more than one year prior to the licensee's response to the NAL even though the licensee was advised in the attachment to the NAL that any statement concerning inability to pay "should contain no data older than one year from the date of your response." Moreover, even if the material had been timely, the tax returns do not reflect profit and loss information which demonstates actual financial condition. Second, the sale of KSLY-FM at what the licensee claims was a substantial loss does not establish that the licensee is unable to pay a $12,000 forfeiture. Again, beyond the licensee's claim that a loss was incurred, there is no accompanying data to demonstrate current cash flows and other indicia of actual financial condition. Thus, there is no basis for determining the licensee's ability to pay. Finally, the licensee has not shown that any other factors warrant reduction or rescission. We, therefore, deny its request that the forfeiture amount be reduced or the NAL be rescinded because of financial condition. 16. Accordingly, IT IS ORDERED, that the petition for reconsideration filed by the NAACP IS DISMISSED. 17. IT IS FURTHER ORDERED, that San Luis Obispo Limited Partnership's Petition for Reconsideration of the short-term renewal is dismissed as moot; the reporting conditions are waived; and the portion constituting the response to the NAL IS GRANTED TO THE EXTENT DISCUSSED 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 the licensee FORFEIT to the United States the sum of twelve thousand dollars ($12,000) for 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 San Luis Obispo Limited Partnership. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary