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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 ) ) Notice of Apparent Liability for Forfeiture of ) ) UNION ELECTRIC COMPANY ) File No. 920EF0030 ) Licensee of Land Mobile and Microwave ) Stations in the State of Missouri ) NOTICE OF APPARENT LIABILITY FOR FORFEITURE Adopted: May 5, 1999 Released: May 6, 1999 By the Chief, Enforcement and Consumer Information Division, Wireless Telecommunications Bureau: I. INTRODUCTION 1. This is a Notice of Apparent Liability for Forfeiture ("NAL"), issued pursuant to Section 503(b) of the Communications Act of 1934, as amended, and Section 1.80 of the Commission's Rules, against Union Electric Company ("Union"), licensee of Land Mobile and Microwave stations in the State of Missouri. For the reasons that follow, we find that Union engaged in a pro forma transfer of control of its stations to Ameren Corporation ("Ameren") without prior Commission consent, in violation of Section 310(d) of the Communications Act of 1934, as amended ("Act") and Section 101.53 of the Commission's Rules. We conclude that Union is apparently liable for a forfeiture in the amount of twenty thousand dollars ($20,000). II. BACKGROUND 2. On December 31, 1997, Union and CIPSCO, Incorporated ("CIPSCO") merged to form a new entity, Ameren Corporation ("Ameren"). As a result of the merger, CIPSCO ceased to exist and Union became an operating subsidiary of Ameren. A subsidiary of CIPSCO, Central Illinois Public Service Company ("CIPS"), also a Commission licensee, survived to become an Ameren subsidiary. Union and CIPS continued to hold their respective licenses after the merger. 3. On April 17, 1998, approximately three and one-half months after the merger was consummated, Union brought this matter to the Commission's attention and filed an application for consent to the transfer of control of its land mobile and microwave licenses to Ameren. In an accompanying transmittal letter, Union proffered no explanation for its failure to request Commission consent prior to the merger. The Commission granted the application on May 6, 1998. During the pendency of the Bureau's investigation of this matter, on March 18, 1999, Union informed the Bureau that it had implemented a compliance program to ensure future compliance with the Commission's Rules and avoid derelictions. III. DISCUSSION 4. Section 310(d) of the Communications Act provides in pertinent part: No construction permit or station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby. This section was codified for fixed microwave services at Section 101.53(a) of the Commission's Rules. 5. Our review of the transaction indicates that control of Union's stations was transferred to Ameren as a result of the merger; however, the transaction constituted a pro forma transfer of control. The Commission has stated that a pro forma transfer of control includes a "transfer from a corporation to a wholly owned subsidiary thereof or vice versa." In this case, Union engaged in a pro forma transfer of control of its licenses when Union and CIPSCO merged into, and became subsidiaries of, Ameren. At that time, control of Union's stations passed from Union's stockholders, who previously had held a 100% interest in the stations, to Ameren, a company in which Union's former shareholders hold a majority interest. 6. Failure to obtain Commission consent to a transfer of control is a violation for which the Commission has long imposed monetary forfeitures. It is undisputed that Union did not apply for or obtain Commission consent prior to the transfers of control of its stations to Ameren on December 31, 1997. The guidelines contained in the Commission's Forfeiture Policy Statement, which became effective on October 14, 1997, give a base forfeiture amount of $1,000 for each unauthorized pro forma transfer of control. Section 503(b)(2)(D) of the Act and Section 1.80(b)(4) of the Commission's Rules require us to take into account "the nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, and history of prior offenses, ability to pay, and such other matters as justice may require." 7. There are several circumstances in this matter which mitigate the amount of the forfeiture. We note that Union voluntarily brought this matter to the Commission's attention; only three and one-half months had passed between the time the merger was consummated and Union sought to remedy its dereliction; the transfers were pro forma in nature; the apparent violations arose out of one transaction eliminating any suggestion that Union engaged in a pervasive pattern of misconduct; the stations involved are noncommercial facilities used by Union, a public utility, for its own internal business communications; and Union has implemented a compliance program designed to eliminate future derelictions. While we continue to believe that engaging in an unathorized transfer of control constitutes a serious breach of licensee responsibility, given these mitigating factors, we find on balance that a forfeiture in the amount of twenty thousand dollars ($20,000) is appropriate. IV. Ordering Clauses 8. ACCORDINGLY, IT IS ORDERED, pursuant to Section 503(b) of the Communications Act of 1934, as amended, Section 1.80 of the Commission's Rules, and the authority delegated in Section 0.331 of the Commission's Rules, Union is hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the amount of twenty thousand dollars ($20,000) for willfully and repeatedly violating Section 310(d) of the Communications Act of 1934, as amended, and Section 101.53 of the Commission's Rules. 9. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's Rules, that within thirty days of the release of this Notice, Union SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a written statement seeking reduction or cancellation of the proposed forfeiture. 10. IT IS FURTHER ORDERED that a copy of this Notice shall be sent by Certified Mail Return Receipt Requested to Union's communications counsel, Shirley S. Fujimoto, Esq., McDermott, Will & Emery, 600 13th Street, N.W., Washington, D.C. 20005-3096. FEDERAL COMMUNICATIONS COMMISSION Catherine W. Seidel Chief, Enforcement and Consumer Information Division Wireless Telecommunications Bureau