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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 ) Liability of ) ) KCIT ACQUISITION COMPANY ) ) Licensee of Television Station ) KCIT(TV), Amarillo, Texas ) ) and ) ) BSP BROADCASTING, INC. ) ) Licensee of Television Station ) KJTL-TV, Wichita Falls, Texas ) ) for Forfeitures ) MEMORANDUM OPINION AND ORDER Adopted: August 4, 1999 Released: August 6, 1999 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), under authority delegated by Section 0.283 of the Commission's Rules, 47 C.F.R.  0.283, has before it for consideration a Joint Petition for Reconsideration (Joint Petition) of our decision in KCIT Acquisition Co. (KCIT(TV))/BSP Broadcasting, Inc. (KJTL-TV), 12 FCC Rcd 20376 (MMB 1997) (KCIT/KJTL Order). That decision denied the requests filed by KCIT Acquisition Company (KCIT Company), licensee of station KCIT(TV), Amarillo, Texas, and BSP Broadcasting, Inc. (BSP), licensee of station KJTL-TV, Wichita Falls, Texas, for reduction of the fifteen thousand dollar ($15,000) forfeiture assessed against each of them for station KCIT(TV)'s and station KJTL-TV's apparent repeated violation of Section 73.670 of the Commission's Rules, 47 C.F.R. 73.670, which limits the amount of commercial matter that may be aired during children's programming. 2. By way of background, on April 1, 1993, KCIT Company and BSP (collectively, Petitioners) filed applications to renew their licenses for stations KCIT(TV) and KJTL-TV, respectively, in which they certified compliance with the children's television commercial limits. In amendments to those applications, however, stations KCIT(TV) and KJTL-TV reported to have exceeded the children's television commercial limits on 75 and 70 occasions, respectively, from January through October, 1992. Offering the same explanations for their violations, Petitioners maintained that the overages occurred even though the stations' formatted their children's programming to comply with the commercial limits. To this end, they attributed some of the overages to last-minute "make goods" or commercial schedule changes made after the stations' "preemption report[s]" had been prepared. In other situations, Petitioners claimed, their stations realized too late that promotional spots contained references to program sponsors. Finally, Petitioners stated that the overages occurred soon after the commercial limits went into effect, that each station had a one-person traffic department and that, after discovering the violations, each station had adopted procedures to assure future compliance. 3. Though we granted renewal of Petitioners' licenses, we also found that station KCIT(TV)'s record of violating the commercial limits on 75 occasions during its last license term, and station KJTL-TV's record of exceeding the commercial limits on 70 occasions during its last license term, constituted repeated violations of Section 73.670 of the Commission's Rules. Accordingly, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), each licensee was advised of its apparent liability for forfeiture in the amount of $15,000. That amount was reached after consideration of the factors set forth in Section 503(b)(2) of the Communications Act, and, in particular: (1) the number and duration of commercial overages; (2) the period of time over which the overages occurred; (3) and whether the licensee had established an effective program to ensure compliance with the children's television commercial limitations. 4. By letters dated May 9, 1994, Petitioners requested reduction of the assessed forfeitures based upon two of the "Downward Adjustment Criteria" established in Policy Statement, Standards for Assessing Forfeitures, 6 FCC Rcd 4695 (1991), recon. denied, 7 FCC Rcd 5339 (1992), revised, 8 FCC Rcd 6215, 6220 (1993) (Policy Statement/Assessing Forfeitures), specifically: (1) good faith or voluntary disclosure; and (2) history of overall compliance with the Commission's Rules. Petitioners argued that the forfeitures against them should be reduced because their overages were voluntarily disclosed and each licensee had a history of compliance with the Commission's Rules. 5. In KCIT/KJTL Order, we rejected those arguments, concluding that disclosures made in the context of a renewal application are required and, therefore, by their nature, not "voluntary." We also acknowledged that Section 503(b)(2)(D) of the Communications Act provides that the Commission, in determining the appropriate amount of a forfeiture, take into account the licensee's history of prior offenses. In this regard, we stated that, under the facts and circumstances of the instant cases, we did not believe that Petitioners' overall history of compliance with the Commission's Rules necessitated or justified a reduction of the specified forfeiture amounts. We noted that both stations apparently had no program or procedures in place to monitor compliance with the children's television commercial limits because, although the stations had been in violation of the limits over a ten-month period from January through October, 1992, they were unaware of the violations at the time their renewal applications were filed on April 1, 1993. This, we stated, demonstrated a serious failure on the part of Petitioners, who at that time were controlled by the same individual, to ensure that the management personnel at their respective stations were aware of, and had established procedures to comply with, the children's television commercial limits. Based on these considerations, we determined that "two separate but related serious failures of licensee responsibility with regard to the children's television commercial limits vitiate[d] any mitigating effect that might arise from the licensees' overall record of compliance with other Commission rules," and ordered Petitioners to forfeit $15,000 each to the United States. 6. Now, in their Joint Petition, Petitioners ask that we reconsider the conclusions reached in KCIT/KJTL Order and reduce the forfeitures against them accordingly. Specifically, they contend that a licensee's failure to comply with the children's television commercial limits, even if the failure is repeated, does not itself demonstrate that the licensee had no compliance program in place. Asserting that they did not willfully neglect their responsibilities as Commission licensees, Petitioners state that they had programs designed to monitor compliance with the commercial limits in place at their stations at the time the overages occurred. However, given the small size of the markets in which the stations are located and the economics of operating small-market stations, Petitioners claim that the best compliance program each station was able to implement highly depended upon the personnel charged with monitoring the program. As a consequence, Petitioners maintain, the stations' overages resulted from human error in managing the existing compliance programs. Thus, Petitioners contend, it is error to subject stations KCIT(TV) and KJTL-TV to forfeiture amounts based on an assumption that the stations lacked compliance programs when the overages, instead, reflect a shortcoming in the programs themselves. 7. Petitioners also request that we reconsider our conclusion that the number of overages reported by stations KCIT(TV) and KJTL-TV vitiated the mitigating effect of the licensees' past record of compliance with the Commission's Rules. Referring to the "Bureau's admitted failure" to consider their history of compliance in assessing the forfeiture amounts at issue, Petitioners argue that a reduction in the amount of the forfeiture is warranted based on that consideration. DISCUSSION 8. Preliminarily, we note that it is, in fact, the efficacy of a licensee's compliance program, not the mere presence of a program, that we look to when assessing a forfeiture for violations of the children's television commercial limits. To wit, it was the deficiencies in the Petitioners' compliance programs, not the lack of a program at each station, that we recognized in KCIT NAL and KJTL NAL, when we stated that "initially [KCIT Company and BSP] did not establish an effective program to monitor compliance with the Commission's commercial limits." [emphasis added] Clearly, the compliance programs at stations KCIT(TV) and KJTL-TV were not effective, as the stations violated the commercial limits on 75 and 70 occasions, respectively, during a ten-month period. That the violations went undiscovered until after the Petitioners had filed their renewal applications, where they had initially certified to compliance with the commercial limits, further attests to the shortcomings in both the Petitioners' compliance programs and the procedures for monitoring those programs. Indeed, the Petitioners concede to the shortcomings in their compliance programs and argue, not that the Commission acted, or would have acted, inappropriately in considering the efficacy of their compliance programs to determine the forfeiture amounts, but that it was error to base the forfeitures on the assumption that the stations lacked such programs. In KCIT NAL and KJTL NAL, because we considered whether Petitioners established effective compliance programs to determine the forfeiture amounts at issue here, we acted appropriately and in a manner consistent with Commission precedent. In this regard, we note here, as we did in KCIT NAL and KJTL NAL, the Commission's expectation that, in delaying the effective date of Section 73.670, broadcasters and cable operators would have additional time within which to hone their plans to ensure compliance with the commercial limits. See id., citing Children's Television Programming, 6 FCC Rcd 5529, 5530 n.10 (1991). The fact that, even with the benefit of that additional time, Petitioners' programs had shortcomings which resulted in a high number of violations at their stations does not warrant reduction in the forfeiture amounts. 9. Next, we disagree with Petitioners' assertion that we failed to consider their history of compliance with the Commission's Rules. Rather, in KCIT/KJTL Order, we appropriately considered Petitioners' past records of compliance in the context of their requests for reduction of the forfeiture amounts. However, based on the facts and circumstances of the instant cases, we determined that, on balance, Petitioners' overall history of compliance with the Commission's Rules neither necessitated nor justified a reduction of the specified forfeiture amounts. Initially, we note that Section 503 of the Communications Act affords the Commission a great deal of discretion in determining forfeiture amounts. Further, while Section 503(b)(2) of the Communications Act requires us to consider a licensee's history of prior offenses in determining a forfeiture amount, it does not mandate that we mitigate a forfeiture amount should the licensee have no history of prior offenses. A licensee's compliance history must be considered along with the other factors set forth in Section 503(b)(2), namely, but not limited to, the number and duration of the commercial overages, the period of time over which they occurred and whether the licensee had established an effective compliance program. Given the high number of total overages in each case, the duration of those overages, see supra nn.1 and 2, the extended ten-month period over which they occurred without detection and the deficiency in the Petitioners' compliance programs, it was within our discretion to determine that a forfeiture in the amount of $15,000 against each licensee was appropriate. In view of these same considerations, and in light of the separate but related failures of licensee responsibility with respect to the children's television commercial limits due to the fact that the Petitioners were commonly controlled at the time the violations on each station occurred, see supra  5 and n.7, we likewise acted appropriately in KCIT/KJTL Order by finding that Petitioners' "unblemished" records of compliance with the Commission did not warrant a reduction of the assessed forfeiture amounts. For these reasons, we affirm our decision in KCIT/KJTL Order that, given the totality of the facts and circumstances in the instant cases, Petitioners' history of compliance with the Commission's Rules does not warrant a reduction in the amount of the forfeitures. CONCLUSION 10. Therefore, we conclude that the arguments contained in the Joint Petition for Reconsideration of our decision in KCIT Acquisition Co. (KCIT(TV))/BSP Broadcasting, Inc. (KJTL- TV), 12 FCC Rcd 20376 (MMB 1997), affirming the $15,000 forfeitures assessed in KCIT Acquisition Co., 9 FCC Rcd 1827 (1994) and BSP Broadcasting, Inc., 9 FCC Rcd 1829 (1994), do not warrant or necessitate a reduction of those forfeiture amounts. 11. Accordingly, IT IS ORDERED THAT the Joint Petition for Reconsideration filed by KCIT Acquisition Company and BSP Broadcasting, Inc. IS DENIED. 12. IT IS FURTHER ORDERED THAT, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), KCIT Acquisition Company FORFEIT to the United States the sum of fifteen thousand dollars ($15,000) for repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R.  73.670. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. With regard to this forfeiture against KCIT(TV), KCIT Acquisition Company may take any of the actions set forth in Section 1.80 of the Commission's Rules, 47 C.F.R.  1.80, as summarized in the attachment to this Memorandum Opinion and Order. 13. IT IS FURTHER ORDERED THAT, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C.  503(b), BSP Broadcasting, Inc., FORFEIT to the United States the sum of fifteen thousand dollars ($15,000) for repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R.  73.670. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. With regard to this forfeiture against KJTL-TV, BSP Broadcasting, Inc., may take any of the actions set forth in Section 1.80 of the Commission's Rules, 47 C.F.R.  1.80, as summarized in the attachment to this Memorandum Opinion and Order. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau