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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 re ) ) COURTESY COMMUNICATIONS, INC. ) ) Notice of Apparent Liability for Forfeiture) File No. 620EF0012 for Licensee of Paging and Radiotelephone) Service Station KRS679, Ritzville, Washington) ) ) MEMORANDUM OPINION AND ORDER Adopted: February 17, 1999 : Released: March 17, 1999 By the Commission: I. INTRODUCTION 1. The Commission has before it for consideration: (a) a Memorandum Opinion and Order by the Wireless Telecommunications Bureau ("Bureau") imposing a $6,000 forfeiture against Courtesy Communications, Inc. ("Courtesy") for failing to file certain FCC forms in violation of Section 22.142(b) of the Commission's Rules; and (b) an Application for Review of the MO&O, filed on May 30, 1997, by Courtesy. In its Application for Review, Courtesy seeks reduction or rescission of the forfeiture liability. For the reasons discussed below, we grant the Application for Review to the extent of reducing the forfeiture amount to $4,500 and otherwise affirm the Bureau's decision to assess a forfeiture for Courtesy's violations of the Commission's Rules. II. BACKGROUND 2. On October 27, 1993, the Commission granted Courtesy authorization to relocate its three base stations for Station KRS679 to a new site in Ritzville, Washington. The stations are used to provide common carrier paging services. The construction period for the authorization ended October 27, 1994. Courtesy relocated its stations and began operation within that one year period. However, Courtesy failed to file a notification within 15 days of commencement of service for each of the authorized frequencies, as required by Section 22.142(b) of the Commission's Rules. 3. On October 18, 1995, the Bureau released a Public Notice which proposed to terminate Courtesy's three frequency authorizations because they had expired. On November 21, 1995, Courtesy filed an emergency request for Special Temporary Authority ("STA"). The Bureau granted the STA on December 1, 1995. On August 5, 1996, the Bureau issued a Notice of Apparent Liability for Forfeiture ("NAL") against Courtesy in the amount of $6,000, for failing to timely file FCC Forms 489 for the three frequencies on which Station KRS679 operates. On August 26, 1996, Courtesy filed a response to the NAL in which it requested rescission or reduction of the forfeiture. In support, Courtesy argued that it had suffered financial losses, it had violated the Commission's Rules only once, the violation was minor, and Courtesy has a record of compliance with the Commission's Rules. 4. In its MO&O, the Bureau considered and rejected all of Courtesy's arguments. The Bureau first noted that Courtesy did not dispute the underlying facts. The Bureau rejected the arguments that the forfeiture should be reduced or cancelled because the violation was unintentional and the fine was disproportionate to the violations. Based upon PJB Communications of Virginia, Inc., 7 FCC Rcd 2088 (1992), the Bureau concluded that Courtesy's financial condition was not a basis for reducing the forfeiture. It also rejected Courtesy's argument that there was only one violation of the Commission's Rules, even though there were three transmitters for which Courtesy failed to file FCC Forms 489. Finally, the Bureau rejected Courtesy's arguments that the forfeiture should be reduced because the violation was minor and because Courtesy has a record of compliance with the Commission's Rules. III. DISCUSSION 5. In its Application for Review, Courtesy sets forth five arguments. First, Courtesy argues that the Bureau erred in finding three violations of Section 22.142(b) instead of one. Courtesy contends that the simultaneous relocation of its three Ritzville base stations should be treated as a single action rather than three separate actions, and, therefore, Courtesy was only required to file one FCC Form 489. Second, Courtesy claims that the Bureau improperly set the forfeiture amount based on an objective formula established in AllCity Paging, Inc., 9 FCC Rcd 6485 (1994)(AllCity), and that formula failed to take Courtesy's unique circumstances into account, as required by Section 503(b)(2)(D) of the Act. Third, Courtesy argues that the forfeiture should have been cancelled or substantially reduced because of "Courtesy's 'consistent record of conformity with all FCC regulations for 2[7] years.'" Fourth, Courtesy proffers two new arguments that it did not make below. It argues that forfeitures totaling $6,000 are punitive in nature and do not impel compliance, as dictated in Crowell-Collier Broadcasting Corp., 44 FCC 2444 (1961). Finally, it argues that the MO&O failed to consider Courtesy's "degree of culpability" in violation of Section 503(B)(2)(D) of the Act. A. Courtesy Committed Multiple Violations 6. We reject Courtesy's argument that it committed only one violation of Section 22.142(b) of our rules. Courtesy contends that because the frequencies were simultaneously relocated to its Ritzville base station, its failure to file an FCC Form 489 should be treated as a single inaction rather than three separate inactions, and, therefore, only one FCC Form 489 was required to be filed, and only one Section 22.142(b) violation has been committed. We disagree with Courtesy's argument. The Commission and its staff, on delegated authority, have consistently held that each transmitter provides an authorized service, and therefore, notification is required for each. Under similar factual circumstances, the staff issued eight Notices of Apparent Liability for Forfeiture (NALF) for violations of the notification requirement for eight authorized transmitters. These NALFs were released and publicly available prior to October 27, 1994, the date Courtesy was required to commence service. Consequently, Courtesy knew or should have known the number of violations (i.e., three) for which it would be liable if it did not timely notify the Commission about commencing service using three authorized frequencies. The fact that the Bureau issued a single NALF for Courtesy's failure to notify regarding its three frequncies, rather than a separate NALF for each frequency not notified, does not change the analysis. The Bureau could have, in its discretion, issued three NALFs. Likewise, the Bureau previously considered and rejected this argument in Telepersonal Communications, Inc., 11 FCC Rcd 12268, 12269 (Wireless Tel. Bur. 1996), as follows: Section 22.142(b) of the Commission's Rules requires licensees to timely notify the Commission of the commencement of service to subscribers. Such notification is required for each authorized transmitter. In the instant case, Telepersonal was authorized to operate on three different frequencies, utilizing as many transmitters. It was required to timely notify the Commission when each transmitter was placed in service. Telepersonal, however, did not timely notify the Commission when any of its three transmitters commenced operations. Accordingly, it must be held that Telepersonal violated Section 22.142(b) on three separate occasions. It is of no consequence that Telepersonal could have availed itself of a single FCC Form 489 to notify the Commission about the operational status of its three transmitters. The number of violations which Telepersonal committed was appropriately based on the number of operating transmitters for which Telepersonal failed to provide the required notification, not the number of FCC Forms 489 that Courtesy may have opted to file. We are persuaded by the Bureau's analysis in Telepersonal. Similarly, in this case, Courtesy was required to file a Form 489 for each frequency in question, and it therefore violated Section 22.142(b) of the Commission's Rules three times. 7. Further, the purpose of an FCC Form 489 is to notify the Commission that construction has been completed and service has begun. We rely on this notification in fulfilling our spectrum management functions. FCC Form 489 is a tool of spectrum management in that it informs us of whether the facility has been built and the frequency is in use. For instance, if the licensee fails to provide an FCC Form 489 to the Commission, the Commission presumes the frequency is not in use and will cancel the authorization through public notice and make it available to the public. As a result, the Commission could unknowingly assign a frequency that is already in use, resulting in harmful co-channel interference. Significantly, avoidance of harmful interference between users is one of the core purposes of our spectrum management duties. Consequently, the information provided on the Form 489 is necessary for effective and efficient spectrum management. There is no dispute that Courtesy failed to timely notify the Commission about the commencement of service on each of the three frequencies. Therefore, Courtesy committed three separate violations of Section 22.142(b). B. Calculation of the Forfeiture Amount 8. We also find Courtesy's argument that the Bureau erred in imposing forfeitures based on AllCity Paging, Inc. to be unpersuasive. The Commission recently decided a similar case involving a licensee which had failed to timely file eight FCC Forms 489, Emery Telephone (Emery). Courtesy has made the same argument as Emery did, i.e., in using AllCity as precedent for its determination that $2,000 was an appropriate amount for each Form 489 violation, the Commission applied a "strictly objective mathematical formula" that did not consider its unique circumstances as required by  503(b)(2)(D) of the Act. In Emery, the Commission rejected that argument by explaining that although the Bureau had reduced the forfeiture by the same final amount in both AllCity and Emery, it did consider the particular facts and circumstances of Emery's case, and that the forfeiture amount was a product of a review of the statutory factors in  503(b)(2)(D). In Emery, the factor the Bureau found most persuasive in mitigating or reducing the forfeiture amount to $1,000 each for six of the violations was Emery's voluntary disclosure to the Commission. Given the great number of licensees and the limited enforcement capabilities of the Commission, we want to encourage licensees to come forward with any violations they may have committed. Courtesy was in operation for approximately two years without having filed a FCC Form 489 for the three frequencies, and only noticed this deficiency after the Commission proposed to terminate its licenses as expired for failure to file notice of operation. Indeed, the case Courtesy relied on for a reduction of the forfeiture, Tri-County Telephone, 54 RR 2d 1065 (Common Car. Bur. 1983), involved a licensee that had voluntarily disclosed its violation to the Commission. 9. In one minor respect, however, we do believe it is appropriate to modify the Bureau's analysis of the appropriate forfeiture amount. Courtesy seeks rescission of the forfeiture based upon its history of compliance with the Commission's Rules. Courtesy unduly relies on Liberty Communications, Inc., 9 FCC Rcd 3188 (1994) and David L. Hollingsworth, 7 FCC Rcd 6640 (1992) in support of its position that the forfeiture should be rescinded based upon its record. These cases dealt with forfeitures under the guidelines contained in the vacated 1991 Forfeiture Policy Statement, which were remitted because the percentage reduction amount (for history of past regulatory compliance) taken from the vacated guidelines exceeded or met the amounts of the already-reduced forfeitures. Because those guidelines are no longer in effect, these cases are inapposite. Nonetheless, we do believe that Section 503(b)(2)(D) of the Act requires consideration of the fact that Courtesy does not have a "history of prior offenses" before the Commission. Because Courtesy has maintained a record of compliance with the Commission's rules for almost three decades, we believe this is a factor worthy of consideration. While this factor is not as important as voluntarily disclosure of a violation, under the circumstances of this case, it is entitled to some consideration. Accordingly, we believe that taking into consideration all of the pertinent circumstances of this case, the forfeiture should be reduced to $4,500. C. Courtesy's New Arguments 10. We will not consider Courtesy's new arguments that: (1) the total forfeiture amount is punitive in nature and does not impel substantial compliance as dictated by Crowell-Collier Broadcasting Corp., 44 FCC 2444 (1961) and (2) that the Bureau failed to consider Courtesy's "lack of culpability" in determining the amount of the forfeiture. Section 1.115(c) of the Commission's Rules, provides that "No application for review will be granted if it relies on questions of fact or law upon which the designated authority has been afforded no opportunity to pass." Courtesy did not make these arguments below. Therefore, Courtesy's new arguments may not be considered and they are therefore dismissed. Moreover, even if we did consider these arguments, they would not provide any basis for cancelling or reducing the forfeiture. We read Crowell-Collier as supporting the $4,500 forfeiture we impose here, as it is consistent with the Commission's policy to "impel . . . licensees to become familiar with the terms of their licenses and the applicable rules, and to adopt procedures, including periodic review operations, which will ensure that stations will be operated in substantial compliance with their licenses and the Commission's rules." We do not believe Courtesy made any showing that the original $6,000 forfeiture originally imposed would have been punitive. Courtesy has also not demonstrated that the forfeiture would threaten its ability to serve the public due to its consistent losses experienced during 1994, 1995, and continuing into the first half of 1996. Moreover, the MO&O noted that the violation was unintentional. We hereby affirm that our calculation of the forfeiture is based upon the totality of the circumstances we are required to consider under Section 503(B)(2)(D) of the Act. IV. CONCLUSION AND ORDERING CLAUSES 11. For the reasons stated above, we conclude that Courtesy's arguments are insufficient to justify rescission of the forfeitures. However, we conclude that it is appropriate to reduce Courtesy's forfeiture liability to $4,500. 12. ACCORDINGLY, IT IS HEREBY ORDERED that the Application for Review filed by Courtesy Communications, Inc. on May 30, 1997 IS GRANTED to the extent indicated herein and is otherwise DENIED. 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), and Section 1.80 of the Commission's Rules, 47 C.F.R.  1.80, Courtesy Communications is hereby advised of its LIABILITY FOR FORFEITURE in the amount of four thousand five hundred dollars ($4,500) for repeated violations of Section 22.142(b) of the Commission's Rules, 47 C.F.R.  22.142(b). 14. IT IS FURTHER ORDERED that a copy of this Order SHALL BE SENT to Courtesy, in care of Blooston, Mordkofsky, Jackson & Dickens, 2120 L Street, N.W., Washington, DC 20037, by Certified Mail, Return Receipt Requested. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary