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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554

In the Matter of                  )
                                 )
Arnold Broadcasting Company,      )    File Number:  EB-02-DV-383
Inc.                              )    
                                 )    NAL/Acct. No. 200332800007
Licensee of Station KNEC(FM)      )    FRN  0006-1597-43
Yuma, Colorado                    )
Facility ID #84353                )



              NOTICE OF APPARENT LIABILITY FOR FORFEITURE

                                             Released:  December 4, 
                                             2002

By the District Director, Denver Office, Enforcement Bureau:


                         I.  INTRODUCTION

     1.   In this Notice of Apparent Liability for Forfeiture ("NAL"), 
we   find   that   Arnold   Broadcasting   Company,   Inc.,   ("Arnold 
Broadcasting")  licensee  of  FM  broadcast  station  KNEC,  in  Yuma, 
Colorado, has apparently willfully and repeatedly violated Section 301 
of the Communications Act of 1934, as amended ("Act"), by operating an 
unlicensed  aural  broadcast   auxiliary  station  without  Commission 
authorization, and willfully and  repeatedly violated Section 11.61 of 
the Commission's Rules ("Rules")1, by  failing to receive and transmit 
required weekly and monthly  Emergency Alert System ("``EAS"'') tests.  
We conclude, pursuant  to Section 503(b) of the  Communications Act of 
1934, as amended,2 that Arnold Broadcasting is apparently liable for a 
forfeiture in the amount of twelve thousand dollars ($12,000).

                         II.  BACKGROUND

     2.   On June  13, 2002, a  Denver Office Agent  inspected station 
KNEC.  The  station operated  an unlicensed aural  broadcast auxiliary 
radio station,  specifically, a studio-to-transmitter link  ("STL") on 
948.0 MHz  at KNEC's  studio, 205 South  Main Street,  Yuma, Colorado.  
This STL link  terminated at KNEC's transmitter  site approximately 12 
kilometers south of Yuma, Colorado.  According to the Station Manager, 
the station had operated the STL since May of 1999.  

     3.   Review  of   the  FCC's   databases  revealed   that  Arnold 
Broadcasting submitted an application for a  STL license to the FCC on 
July  16,   2002,  approximately  one  month   following  the  station 
inspection.  On October 23, 2002,  the FCC granted Arnold Broadcasting 
a license for the 948.0 MHz STL, and assigned call sign WPWD551. 

     4.   At  the  time of  inspection  on  June  13, 2002,  KNEC  was 
monitoring the designated LP1 radio station KNNG, also owned by Arnold 
Broadcasting, and the National Weather Service for EAS purposes.  KNEC 
was not monitoring  the designated LP2 station,  KATR(FM) or KRDZ(AM).  
According  to the  State of  Colorado EAS  Plan, the  National Weather 
Service is a  recommended additional source but not  a replacement for 
the  designated local  primary station.   Review of  the station  logs 
revealed  that KNEC  received  no  required monthly  EAS  test and  no 
required weekly  EAS test from the  designated LP1 or LP2  sources for 
the  period from  May 13,  2002, to  June 9,  2002.  In  addition, the 
station logs revealed that KNEC failed to transmit two required weekly 
EAS tests during the period from May 13, 2002, to June 9, 2002.  


                           III.  DISCUSSION

     5.   Section  503(b) of  the  Act provides  that  any person  who 
willfully fails to comply substantially  with the terms and conditions 
of  any  license,  or  willfully  fails  to comply  with  any  of  the 
provisions of  the Act or of  any rule, regulation or  order issued by 
the Commission thereunder, shall be  liable for a forfeiture penalty.3  
The term "willful"  as used in Section 503(b) has  been interpreted to 
mean simply that the acts or omissions are committed knowingly and the 
term "repeated" means the commission or  omission of the Act more than 
once or for more than one day.4

     6.   Section 301 of  the Act sets forth generally  that no person 
shall use or  operate any apparatus for the transmission  of energy or 
communications or  signals by  radio within  the United  States except 
under and in accordance with this Act and with a license granted under 
the provisions  of this  Act.  The Rules  governing the  licensing and 
operation of aural broadcast  auxiliary stations, including STL's used 
by FM radio stations  are set forth under Subpart E of  Part 74 of the 
Rules.5   Based on  the  evidence, we  find  that Arnold  Broadcasting 
willfully and repeatedly violated Section  301 of the Act by operating 
an aural auxiliary broadcast station without a license.

     7.   The Rules provide that every  AM and FM broadcast station is 
part  of  the   nationwide  EAS  network  and  is   categorized  as  a 
participating  national EAS  source unless  the station  affirmatively 
requests  authority  to  not   participate.6   The  EAS  provides  the 
President  and state  and  local governments  with  the capability  to 
provide immediate and emergency  communications and information to the 
public.7  State  and local area  plans identify local  primary sources 
responsible for coordinating carriage of common 



emergency messages from  sources such as the  National Weather Service 
or local emergency management officials.8

8.      The Rules require  all broadcast stations  to ensure  that EAS 
   encoders,  EAS  decoders   and  attention  signal   generating  and 
   receiving  equipment  is  installed  so  that  the  monitoring  and 
   transmitting functions are available  during the times  the station 
   is in operation.9  The Rules also require AM and FM stations to (a) 
   receive monthly EAS tests from designated local primary EAS sources 
   and retransmit the monthly  test within 60 minutes  of receipt, and 
   (b) conduct tests of the EAS  header and EOM codes at  least once a 
   week at random days and times.10  Based on  the evidence before us, 
   we find that Arnold Broadcasting willfully  and repeatedly violated 
   Section 11.61 of the  Commission's Rules by failing  to receive and 
   transmit the required monthly and weekly EAS tests. 

9.      The base forfeiture amount set by  The Commission's Forfeiture 
   Policy Statement  and Amendment  of Section  1.80 of  the Rules  to 
   Incorporate  the   Forfeiture   Guidelines,   ("Forfeiture   Policy 
   Statement"),11 and Section  1.80 of  the Commission's  Rules,12 for 
   operating an  unlicensed  radio  station  is  $10,000 and  for  EAS 
   equipment not installed or  operational is $8,000.   The Forfeiture 
   Policy Statement does  not establish a  base forfeiture  amount for 
   violating the Commission's Rules requiring  the monitoring, receipt 
   and transmission of the required monthly and  weekly EAS tests from 
   the designated LP1 and  LP2 sources.  Therefore, we  must determine 
   what an appropriate amount  should be for this  violation.13  It is 
   necessary to  monitor the  designated LP1  and LP2  sources and  to 
   receive and transmit the  required EAS tests from  these designated 
   sources to ensure  the operational integrity  of the EAS  system in 
   the event  of an  actual disaster.   The requirement  that stations 
   monitor, receive and transmit the required EAS  tests is similar in 
   both nature and  severity to  other required  operational readiness 
   checks.  As  failure  to  make  measurements  or  conduct  required 
   monitoring carries a base forfeiture amount  of $2,000, pursuant to 
   the Forfeiture Policy Statement, the forfeiture will be assessed in 
   the amount of $2,000.

10.     In  assessing the  monetary  forfeiture amount,  we must  also 
   take into  account  the  statutory  factors  set forth  in  Section 
   503(b)(2)(D) of the Act,14 which include the nature, circumstances, 
   extent, and gravity  of the violation(s),  and with respect  to the 
   violator, the degree of culpability, and history of prior offenses, 
   ability to  pay, and  other such  matters as  justice may  require.  
   Applying the Forfeiture Policy Statement and  the statutory factors 
   to the instant case, a $12,000 forfeiture is warranted.  

                         IV.  ORDERING CLAUSES

11.     Accordingly,  IT IS ORDERED  THAT, pursuant to  Section 503(b) 
   of the Communications Act of 1934, as  amended, and Sections 0.111, 
   0.311 and  1.80  of  the  Commission's Rules,  Arnold  Broadcasting 
   Company, Inc., is  hereby NOTIFIED of  an APPARENT LIABILITY  FOR A 
   FORFEITURE in the amount  of twelve thousand dollars  ($12,000) for 
   violation of  Section 301  of the  Communications Act  of 1934,  as 
   amended and Section 11.61 of the Rules.15

12.     IT IS  FURTHER ORDERED THAT,  pursuant to Section 1.80  of the 
   Commission's Rules, within thirty days of the  release date of this 
   NOTICE OF APPARENT  LIABILITY,  Arnold Broadcasting  Company, Inc., 
   SHALL PAY the full amount of the proposed  forfeiture or SHALL FILE 
   a written  statement  seeking  reduction  or  cancellation  of  the 
   proposed forfeiture.

13.     Payment of  the forfeiture may be  made by mailing a  check or 
   similar  instrument,   payable  to   the  order   of  the   Federal 
   Communications Commission,  to the  Forfeiture Collection  Section, 
   Finance Branch, Federal Communications Commission,  P.O. Box 73482, 
   Chicago, Illinois  60673-7482.  The  payment MUST  INCLUDE the  FCC 
   Registration number  (FRN) and  also  must note  the NAL/Acct.  No. 
   referenced in the caption.

14.     The   response,   if   any,   must  be   mailed   to   Federal 
   Communications Commission, Enforcement Bureau, Technical and Public 
   Safety Division, 445 12th Street, S.W., Washington, D.C. 20554, and 
   MUST INCLUDE THE NAL/Acct. No. referenced in the caption.  

15.     The  Commission  will not  consider  reducing  or canceling  a 
   forfeiture in response  to a claim of  inability to pay  unless the 
   petitioner submits:  (1) federal  tax returns  for the  most recent 
   three-year period; (2)  financial statements prepared  according to 
   generally accepted accounting practices ("GAAP"); or (3) some other 
   reliable and objective  documentation that accurately  reflects the 
   petitioner's current financial status.   Any claim of  inability to 
   pay must specifically identify the basis for the claim by reference 
   to the financial documentation submitted.  

16.     Requests  for payment  of the  full amount  of this  Notice of 
   Apparent Liability  under an  installment plan  should be  sent to:  
   Chief, Revenue and Receivables  Operations Group, 445  12th Street, 
   S.W., Washington, D.C. 20554.16

17.     Under the Small Business  Paperwork Relief Act of 2002, Pub L. 
   No. 107-198, 116 Stat. 729 (June 28, 2002), the FCC is engaged in a 
   two-year tracking process regarding  the size of  entities involved 
   in forfeitures.  If you qualify  as a small entity and  if you wish 
   to be treated  as a small entity  for tracking purposes,  please so 
   certify to us within thirty  (30) days of this NAL,  either in your 
   response to  the NAL  or in  a separate  filing to  be sent  to the 
   Federal Communications Commission, Enforcement  Bureau, Technical & 
   Public Safety Division.  Your certification should indicate whether 
   you, including your parent entity and its subsidiaries, meet one of 
   the definitions set forth in the list provided  by the FCC's Office 
   of Communications  Business  Opportunities  ("OCBO") set  forth  in 
   Attachment  A  of   this  Notice   of  Apparent   Liability.   This 
   information will be used for tracking purposes only.  Your response 
   or failure to respond to this question will  have no effect on your 
   rights and responsibilities pursuant to 

Section 503(b) of the Act.  If you have questions regarding any of the 
information contained  in Attachment A,  please contact OCBO  at (202) 
418-0990.

18.     IT IS FURTHER  ORDERED THAT a copy of this  NOTICE OF APPARENT 
   LIABILITY shall be  sent by  Certified Mail #  7001 0320  0002 9702 
   9493, Return  Receipt Requested  and  First Class  Mail, to  Arnold 
   Broadcasting Company, Inc., 803 W. Main  Street, Sterling, Colorado  
   80751.

                              FEDERAL COMMUNICATIONS COMMISSION



                              Leo E. Cirbo
                              District Director, Denver Office

Enclosure:  Attachment AAttachment A

                                                          October 2002


                 FCC List of Small Entities

    As described below, a "small entity" may be a small 
                       organization,
  a small governmental jurisdiction, or a small business.

(1)  Small Organization 
Any not-for-profit enterprise that is independently owned 
and operated and 
is not dominant in its field.

  
(2)  Small Governmental Jurisdiction
Governments of cities, counties, towns, townships, villages, 
school districts, or 
special districts, with a population of less than fifty 
thousand.


(3)  Small Business
Any business concern that is independently owned and 
operated and 
is not dominant in its field, and meets the pertinent size 
criterion described below.
  

       Industry Type          Description of Small Business 
                                     Size Standards
                 Cable Services or Systems
                             Special Size Standard - 
Cable Systems                 Small Cable Company has 400,000 
                             Subscribers Nationwide or Fewer
Cable and Other Program 
Distribution                      $12.5 Million in Annual 
                                    Receipts or Less

Open Video Systems 
        Common Carrier Services and Related Entities
Wireline Carriers and 
Service providers 
                                1,500 Employees or Fewer
Local Exchange Carriers, 
Competitive Access 
Providers, Interexchange 
Carriers, Operator Service 
Providers, Payphone 
Providers, and Resellers

Note:  With the exception of Cable Systems, all size 
standards are expressed in either millions of dollars or 
number of employees and are generally the average annual 
receipts or the average employment of a firm.  Directions 
for calculating average annual receipts and average 
employment of a firm can be found in 
13 C.F.R. 121.104 and 13 C.F.R.  121.106, respectively.

                   International Services
International Broadcast 
Stations
                                 $12.5 Million in Annual 
                                    Receipts or Less






International Public Fixed 
Radio (Public and Control 
Stations)
Fixed Satellite 
Transmit/Receive Earth 
Stations
Fixed Satellite Very Small 
Aperture Terminal Systems
Mobile Satellite Earth 
Stations
Radio Determination 
Satellite Earth Stations
Geostationary Space Stations
Non-Geostationary Space 
Stations
Direct Broadcast Satellites
Home Satellite Dish Service
                    Mass Media Services
Television Services

                             $12 Million in Annual Receipts 
                                         or Less
Low Power Television 
Services and Television 
Translator Stations
TV Auxiliary, Special 
Broadcast and Other Program 
Distribution Services
Radio Services
                              $6 Million in Annual Receipts 
                                         or Less
Radio Auxiliary, Special 
Broadcast and Other Program 
Distribution Services
Multipoint Distribution       Auction Special Size Standard -
Service                       Small Business is less than 
                             $40M in annual gross revenues 
                             for three preceding years
          Wireless and Commercial Mobile Services
Cellular Licensees
                                1,500 Employees or Fewer
220 MHz Radio Service - 
Phase I Licensees
220 MHz Radio Service -       Auction special size standard -
Phase II Licensees            Small Business is average gross 
                             revenues of $15M or less for 
                             the preceding three years 
                             (includes affiliates and 
                             controlling principals)
                             Very Small Business is average 
                             gross revenues of $3M or less 
                             for the preceding three years 
                             (includes affiliates and 
                             controlling principals)
700 MHZ Guard Band Licensees


Private and Common Carrier 
Paging
Broadband Personal 
Communications Services          1,500 Employees or Fewer
(Blocks A, B, D, and E)
Broadband Personal            Auction special size standard -
Communications Services       Small Business is $40M or less 
(Block C)                     in annual gross revenues for 
                             three previous calendar years
                             Very Small Business is average 
                             gross revenues of $15M or less 
                             for the preceding three 
                             calendar years (includes 
                             affiliates and persons or 
                             entities that hold interest in 
                             such entity and their 
                             affiliates)
Broadband Personal 
Communications Services 
(Block F)
Narrowband Personal 
Communications Services


Rural Radiotelephone Service     1,500 Employees or Fewer
Air-Ground Radiotelephone 
Service
800 MHz Specialized Mobile    Auction special size standard -
Radio                         Small Business is $15M or less 
                             average annual gross revenues 
                             for three preceding calendar 
                             years
900 MHz Specialized Mobile 
Radio
Private Land Mobile Radio        1,500 Employees or Fewer
Amateur Radio Service                       N/A
Aviation and Marine Radio 
Service                          1,500 Employees or Fewer
Fixed Microwave Services
                             Small Business is 1,500 
Public Safety Radio Services  employees or less
                             Small Government Entities has 
                             population of less than 50,000 
                             persons
Wireless Telephony and 
Paging and Messaging             1,500 Employees or Fewer
Personal Radio Services                     N/A
Offshore Radiotelephone          1,500 Employees or Fewer
Service
Wireless Communications       Small Business is $40M or less 
Services                      average annual gross revenues 
                             for three preceding years
                             Very Small Business is average 
                             gross revenues of $15M or less 
                             for the preceding three years 

39 GHz Service
                             Auction special size standard 
                             (1996) -
Multipoint Distribution       Small Business is $40M or less 
Service                       average annual gross revenues 
                             for three preceding calendar 
                             years
                             Prior to Auction -
                             Small Business has annual 
                             revenue of $12.5M or less
Multichannel Multipoint 
Distribution Service              $12.5 Million in Annual 
                                    Receipts or Less
Instructional Television 
Fixed Service
                             Auction special size standard 
                             (1998) -
Local Multipoint              Small Business is $40M or less 
Distribution Service          average annual gross revenues 
                             for three preceding years
                             Very Small Business is average 
                             gross revenues of $15M or less 
                             for the preceding three years 
                             First Auction special size 
                             standard (1994) -
                             Small Business is an entity 
                             that, together with its 
                             affiliates, has no more than a 
218-219 MHZ Service           $6M net worth and, after 
                             federal income taxes (excluding 
                             carryover losses) has no more 
                             than $2M in annual profits each 
                             year for the previous two years
                             New Standard - 
                             Small Business is average gross 
                             revenues of $15M or less for 
                             the preceding three years 
                             (includes affiliates and 
                             persons or entities that hold 
                             interest in such entity and 
                             their affiliates)
                             Very Small Business is average 
                             gross revenues of $3M or less 
                             for the preceding three years 
                             (includes affiliates and 
                             persons or entities that hold 
                             interest in such entity and 
                             their affiliates)
Satellite Master Antenna 
Television Systems                $12.5 Million in Annual 
                                    Receipts or Less
24 GHz - Incumbent Licensees     1,500 Employees or Fewer
24 GHz - Future Licensees     Small Business is average gross 
                             revenues of $15M or less for 
                             the preceding three years 
                             (includes affiliates and 
                             persons or entities that hold 
                             interest in such entity and 
                             their affiliates)
                             Very Small Business is average 
                             gross revenues of $3M or less 
                             for the preceding three years 
                             (includes affiliates and 
                             persons or entities that hold 
                             interest in such entity and 
                             their affiliates)
                       Miscellaneous
On-Line Information Services  $18 Million in Annual Receipts 
                                         or Less
Radio and Television 
Broadcasting and Wireless 
Communications Equipment          750 Employees or Fewer
Manufacturers
Audio and Video Equipment 
Manufacturers
Telephone Apparatus 
Manufacturers (Except            1,000 Employees or Fewer
Cellular)
Medical Implant Device            500 Employees or Fewer
Manufacturers
Hospitals                     $29 Million in Annual Receipts 
                                         or Less
Nursing Homes                     $11.5 Million in Annual 
                                    Receipts or Less
Hotels and Motels              $6 Million in Annual Receipts 
                                         or Less
Tower Owners                  (See Lessee's Type of Business)

_________________________

     1  47 U.S.C.  301; 47 C.F.R.  11.61.

     2  47 U.S.C.  503(b).

     3  47 U.S.C.  503(b).

     4 Section 312(f)(1) of the Act, 47 U.S.C.  312(f)(1), which 
applies to violations for which forfeitures are assessed under Section 
503(b) of the Act, provides that "[t]he term 'willful', when used with 
reference to the commission or omission of any act, means the 
conscious and deliberate commission or omission of such act, 
irrespective of any intent to violate any provision of this Act...."  
See Southern California Broadcasting Co., 6 FCC Rcd 4387 (1991).   
Section 312(f)(2) of the Act, 47 U.S.C.  312(f)(2), which also 
applies to Section 503(b), provides: "[t]he term "repeated", when used 
with reference to the commission or omission of any act, means the 
commission or omission of such act more than once or, if such 
commission or omission is continuous, for more than one day."

     5  47 C.F.R.  74.501 et seq.

     6  47 C.F.R.  11.11 and 11.41.

     7  47 C.F.R.  11.1 and 11.21.

     8  47 C.F.R.  11.18. State EAS plans contain guidelines that 
must be followed by broadcast and cable personnel, emergency officials 
and National Weather Service personnel to activate the EAS for state 
and local emergency alerts.  The state plans include the EAS header 
codes and messages to be transmitted by the primary state, local and 
relay EAS sources.

     9  47 C.F.R.  11.35.

     10  47 C.F.R.  11.61.  The required monthly and weekly tests are 
required  to  conform  with  the procedures  in  the  EAS  Operational 
Handbook.  See  also, Amendment of  Part 11 of the  Commission's Rules 
Regarding the Emergency Alert System,  EB Docket No. 01-66, Report and 
Order, FCC  02-64 (Feb. 26, 2002);  67 Fed Reg 18502  (April 16, 2002) 
(effective  May  16, 2002,  the  required  monthly  EAS test  must  be 
retransmitted within 60 minutes of receipt.) 

     11   12 FCC  Rcd  17087 (1997),  recon. denied,  15  FCC Rcd  303 
(1999).

     12  47 C.F.R.  1.80.

     13   The  fact that  the  Forfeiture  Policy Statement  does  not 
specify a base  amount does not indicate that no  forfeiture should be 
imposed.  The Forfeiture Policy Statement states that "any omission of 
a    specific   rule    violation   from    the...[Forfeiture   Policy 
Statement]...should  not  signal  that the  Commission  considers  any 
unlisted violation as nonexistent  or unimportant."  Forfeiture Policy 
Statement,  12   FCC  Rcd  at   17,099.   See  e.g.,   American  Tower 
Corporation, 16 FCC Rcd 1282 (2001). 

     14  47 U.S.C.  503(b)(2)(D).

     15  47 U.S.C.  301 and 503(b); 47 C.F.R.  0.111, 0.311, 1.80 
and 11.61.

     16 See 47 C.F.R.  1.1914.