Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Notice of Apparent Liability for Forfeiture of ) ) PUGET SOUND ENERGY, INC. ) File No. 820EF0013 ) Operator of Land Mobile and Microwave Stations ) in the State of Washington ) ORDER OF FORFEITURE Adopted: June 8, 1999 Released: June 9, 1999 By the Chief, Enforcement and Consumer Information Division, Wireless Telecommunications Bureau: I. Introduction 1. The Chief, Enforcement and Consumer Information Division, has under consideration: (a) a Notice of Apparent Liability ("NAL") proposing a forfeiture of $20,000 against Puget Sound Energy Company, Inc. ("PSE"), for acquiring control of the Land Mobile and Microwave stations referenced below, in apparent violation of Section 310(d) of the Communications Act of 1934 ("the Act"), as amended and (b) a response to the NAL filed by PSE on June 8, 1998. PSE argues in its response that the proposed forfeiture liability should be rescinded or reduced. For the reasons discussed below, the request for reduction or recision is denied. II. Background 2. On February 10, 1997, PSE (then doing business as Puget Sound Power and Light Company) acquired Washington Natural Gas ("WNG"), then-licensee of the subject stations. Although PSE assumed control of those stations on February 10, 1997, it did not obtain the Commission's consent prior to that date. PSE voluntarily brought this matter to the Commission's attention and, on April 17, 1997, was granted Special Temporary Authority ("STA") to operate the stations in question. On June 26, 1997, PSE filed applications for Commission consent to the transfer of control of the stations. The Commission granted those applications on August 13, 1997; September 8, 1997; October 1 and 3, 1997; and July 14, 1998. 3. In the NAL, we found that PSE engaged in multiple unauthorized transfers of control, in apparent repeated violation of Section 310(d) of the Act. After considering the factors set forth in Section 503(b)(2)(D) of the Act, including PSE's voluntary disclosure of its misconduct, we reduced the amount of PSE's proposed forfeiture to a total of $20,000. 4. In its response to the NAL, PSE does not dispute that it violated Section 310(d) of the Act. PSE contends, however, that the proposed forfeiture should be rescinded because: (a) the NAL was not issued within the statutory one year period prescribed by Section 503(b) of the Act; (b) the guidelines contained in the Commission's Forfeiture Policy Statement preclude the imposition of a forfeiture against PSE; and (c) the imposition of a forfeiture "departs from established agency practice in a manner that is arbitrary and capricious." Additionally, PSE claims that, if the forfeiture is not rescinded, it should be substantially reduced because it is excessive. III. Discussion 5. PSE's arguments in support of rescinding the forfeiture are without merit. Initially, PSE claims that the forfeiture should be rescinded because the Commission failed to issue the NAL within one year of its misconduct, as required by Section 503(b) of the Act. PSE maintains that any violation Section 310(d) of the Act that may have occurred ended on April 17, 1998, when PSE was granted an STA to operate the stations. According to PSE, it necessarily follows that because the NAL was issued on May 8, 1998 -- more than a year after the misconduct ended -- the NAL was untimely. This argument is unavailing. The STA that the Commission granted authorized PSE to temporarily operate the stations in question. In granting the STA, the Commission did not approve the transfer of control of those stations to PSE. Indeed, it was not until August 13, 1997 that the Commission first consented to PSE's acquisition of control of any of the stations. Until such consent was granted, PSE's control of the stations was inconsistent with, and in continuing violation of, Section 310(d) of the Act. Because the NAL was adopted and released less than one year before the earliest of the dates on which the Commission granted its consent to the transfer of control of the stations to PSE, the NAL was timely under Section 503(b) of the Act. 6. We also do not agree with PSE's argument that the absence of upward adjustment criteria contained in the Commission's Forfeiture Policy Statement warrant recision of the proposed forfeiture against PSE. Initially, we note that the Forfeiture Policy Statement criteria does not apply to this case because the unauthorized transfer of control took place prior to the October 14, 1997 effective date of the Forfeiture Policy Statement. Nonetheless, since the factors PSE refers to are the types of factors that the Commission would have to consider under Section 503(b)(2)(D) of the Act in any instance, we will consider their arguments. Section 503(b)(2)(D) of the Act states: The amount of such forfeiture penalty shall be assessed by the Commission, or its designee, by written notice. In determining the amount of such a forfeiture penalty, the Commission or its designee shall take into account the nature, circumstances, extent, and gravity of the violation and, with respect to the violator, the degree of culpability, any history of prior offenses, and such other matters as justice may require. The language of the statute clearly presupposes that a forfeiture will be issued because it states that the factors it lists will be considered in determining the amount of a forfeiture. PSE's argument that a forfeiture cannot be issued unless aggravating factors are present is thus inconsistent with the language of the statute, which provides that a lower forfeiture can be issued when aggravating factors are not present. Furthermore, in the Forfeiture Policy Statement, the Commission stated that the purpose of upward adjustment factors is to increase the amount of a forfeiture from the base amount. PSE provides no authority for the proposition that the absence of upward adjustment factors requires recision of a monetary forfeiture. Therefore, PSE's arguments on the basis of upward adjustment factors do not warrant recision of the proposed monetary forfeiture. 7. Similarly, PSE's argument that the downward adjustment factors listed in the Forfeiture Policy Statement "weighs heavily in favor of the cancellation or substantial reduction of the forfeiture proposed against PSE" must be rejected. The downward factors contained in the guidelines allow the Commission to reduce potential forfeitures because of the presence of certain mitigating evidence. The first downward adjustment factor is for violations that are considered minor in nature. PSE claims that its violations were minor because of its "prompt response to its discovery of the problem, the unaltered nature of the licensed operations and the absence of harm . . . ." PSE's argument is incorrect because the misconduct involved in this instance involved substantial -- not pro forma -- transfers of control, in violation of Section 310(d) of the Act. In addition, PSE's misconduct involved a large number of stations. Thus, there is no basis for concluding that the violations in this instance were minor. The second downward adjustment factor applies in cases involving voluntary disclosure of misconduct by the licensee in question. We agree with PSE that it made a full and voluntary disclosure to the Commission. Indeed, the Bureau explicitly considered PSE's voluntary disclosure in the NAL and appropriately reduced the proposed forfeiture amount on that basis. PSE has presented no basis for rescinding or further reducing the forfeiture amount because of its voluntary disclosure. The third downward adjustment criterion applies to licensees with a history of overall compliance. In this regard, PSE claims generally to have had "an extended history of overall compliance." Our review of PSE's record as a Commission licensee reveals no history of prior misconduct for which PSE has been sanctioned, a factor that was considered in the NAL in determining an appropriate forfeiture amount. PSE presents no justification on the basis of its past record for rescinding or further reducing the forfeiture. The fourth and final downward adjustment factor relates to a licensee's inability to pay a forfeiture. PSE makes no claim that it is unable to pay the forfeiture amount proposed in the NAL. 8. Finally, PSE urges the Bureau to consider that PSE is an electric utility which uses its stations for the provision of essential communications services. Although this is not an adjustment factor identified in the guidelines, the Bureau did consider the nature of PSE's business and its use of the stations in question in proposing a forfeiture of $20,000. PSE presents no basis for rescinding or further reducing the forfeiture because of its status as an electric utility. 9. PSE's next argument, that the forfeiture amount proposed in the NAL "departs from established agency practice in a manner that is arbitrary and capricious," also is lacking in merit. PSE claims that the Bureau "has made a conscious policy decision not to bring enforcement actions against non-commercial licensees [which violate section 310(d)]" and has arbitrarily changed this policy without any articulated justification. PSE, however, cites no precedent indicating a policy against commencing enforcement actions against non-commercial licensees that violate Section 310(d) of the Act. To the contrary, the Communications Act, the Commission's Rules, and the Commission's Forfeiture Policy Statement, supra, authorize the imposition of monetary forfeitures against both commercial and non-commercial licensees who violate Section 310(d) of the Act. 10. We also find no merit to PSE's request for reduction of the forfeiture amount. PSE relies on a number cases in which the Commission imposed forfeitures equal to or less than the amount of the forfeiture proposed in this case despite the fact that each of the other cases, according to PSE, involved more serious violations than the instant case. While the duration of the violations in the other cases may have been longer than that involved here, the number of stations that PSE operated without Commission consent far exceeded that in any of the cases on which PSE relies. In this regard, we note that PSE's unauthorized transfer of control of each station constituted a separate violation of Section 310(d) of the Act. But for the mitigating factors considered in the NAL, the forfeiture against PSE could have been substantially higher. 11. PSE also argues that $20,000 is an excessive forfeiture amount because PSE has already paid the Commission a fee of $16,250 for filing a request to waive Section 1.924(b) of the Commission's Rules. Alternatively, PSE argues that the fee should be refunded because the waiver request was never acted upon, and grant of the waiver request would have "obviated" any need for a NAL. PSE's waiver request is a distinct matter from the proposed monetary forfeiture. If the waiver request had been granted before the issuance of the NAL, that action would not have prevented the issuance of the NAL. In any event, a monetary forfeiture proceeding is not the proper forum in which to request the refund of a fee. IV. Conclusion and Ordering Clause 12. Based on the foregoing, PSE's arguments are insufficient to justify recision or reduction of the proposed forfeiture. We conclude, therefore, that PSE is liable for a forfeiture in the amount of $20,000. 13. ACCORDINGLY, IT IS ORDERED, pursuant to Section 503(b) of the Communications Act of 1934, as amended, that Puget Sound Energy Company, Inc., SHALL FORFEIT to the United States the sum of twenty thousand dollars ($20,000) for violation of Section 310(d) of the Communications Act of 1934, as amended, 47 U.S.C.  310(d). 14. A copy of this Order is being sent, by Certified Mail/Return Receipt Requested, to PSE's communications counsel, Carole C. Harris, Esq., McDermott, Will & Emery, 1850 K Street, N.W., Washington, D.C. 20006-2296. FEDERAL COMMUNICATIONS COMMISSION Catherine W. Seidel Chief, Enforcement and Consumer Information Division Wireless Telecommunications Bureau