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


                              )
In the Matter of                   )    File No. EB-99-DV-446
                              )    
FM Broadcast Station KNEC               )    NAL/Acct.        No.  
915DV0001 
Arnold Broadcasting Company, Inc.       )
Sterling, Colorado 80751           )    
                                     
                  MEMORANDUM OPINION AND ORDER


     Adopted:  June 28, 2001            Released:  July 5, 2001 


By the Commission:

     1.   In this Order, we  grant in part and  deny in part  the 
January  31,  2001  application   for  review  filed  by   Arnold 
Broadcasting Company, Inc. ("Arnold"), licensee of Station  KNEC-
FM,  of  the  Memorandum  Opinion   and  Order1  issued  by   the 
Enforcement Bureau  in  this  proceeding.   Pursuant  to  Section 
503(b) of  the  Communications Act  of  1934, as  amended  (``the 
Act'')2, and  Section  1.80  of  the  Commission's  Rules  (``the 
Rules'') the Enforcement Bureau ("EB") found Arnold liable for  a 
monetary  forfeiture  in  the  amount  of  $14,000  for   willful 
violation of the following sections of the Rules: 11.35  (failure 
to install and maintain operable Emergency Alert System (``EAS'') 
equipment), 73.1350 (failure to have a transmitter control system 
in place which would allow the transmitter to be shut down within 
three minutes of an event requiring shut down), 73.1820  (failure 
to make  required entries  into the  station log),  and  73.18703 
(failure to  designate  and  post  the  designation  of  a  chief 
operator for the station).  For  the reasons discussed below,  we 
reduce the forfeiture to $10,000.  

                           BACKGROUND

     2.   On May  19, 1999,  agents  of the  Commission's  Denver 
Field Office ("Denver Office") conducted a routine inspection  of 
FM broadcast station KNEC.  The agents found several  violations, 
including those  noted  above.  On  June  7, 1999,  the  District 
Director of  the  Denver  Office  issued  a  Notice  of  Apparent 
Liability  ("NAL")  to  Arnold  in  the  amount  of  $16,000  for 
violations of Sections 11.35, 11.61, 
17.4, 73.1225, 73.1350. 73.1820, and  73.1870 of the Rules.4   On 
February 9, 2000, after receiving  a response from the  licensee, 
the Enforcement Bureau  issued a Forfeiture  Order5 which  upheld 
the NAL.

     3.   On February  24,  2000,  Arnold filed  a  Petition  for 
Reconsideration (``Petition'') of the  Forfeiture Order.  In  its 
Petition, Arnold  argued that  the  forfeiture amount  should  be 
substantially reduced.  In  the  Memorandum  Opinion  and  Order, 
released on January 5, 2001,  the Enforcement Bureau reduced  the 
forfeiture by $2,000 to $14,000 for Arnold's good faith effort to 
comply with the  EAS rules  by ordering EAS  equipment.6  In  all 
other respects, the Bureau upheld the forfeiture.  

     4.   On January 31,  2001, Arnold filed  an application  for 
review of the Memorandum Opinion  and Order.  In its  application 
for review, Arnold again contends  that the forfeiture should  be 
set aside or the amount modified.  In support of its  contention, 
Arnold argues that  (a) the  forfeiture amount  assessed for  the 
failure  to  install  and  maintain  operable  EAS  equipment  is 
excessive; (b)  the  Commission impermissibly  assessed  separate 
forfeitures for not conducting EAS tests and not logging the  EAS 
tests that it had  not conducted; and  (c) the forfeiture  amount 
assessed for KNEC's  failure to maintain  the capability to  shut 
down the transmitter within three  minutes of an event  requiring 
shutdown is excessive. 

                           DISCUSSION
The Section 11.35 Violation

     5.   Section 11.35 of the Rules requires broadcast  stations 
to have the necessary EAS equipment installed so that  monitoring 
and transmitting  functions are  available during  the times  the 
station  and  systems  are  in  operation.   When  Arnold   began 
broadcast operations  on April  12,  1999, it  did not  have  the 
requisite EAS equipment installed  and operational, in  violation 
of Section  11.35.  As  a result,  the Bureau  assessed Arnold  a 
total forfeiture  of  $10,000,  which included  the  $8,000  base 
amount for this violation7 and  a $2,000 upward adjustment.   The 
Bureau imposed  the  upward  adjustment  because  it  deemed  the 
violation to be particularly egregious, given that the  principal 
of Arnold,  Mr.  William  Arnold,  had once  served  as  a  Local 
Emergency Communications  Committee  ("LECC") chairman.   In  its 
application for review,  Arnold contends that  it is contrary  to 
the public interest to impose  a forfeiture on a broadcaster  for 
putting  his  station  on  the  air  before  timely  ordered  EAS 
equipment has been  delivered.  We  do not agree.  The Rules  are 
clear that EAS equipment must be installed and operational before 
broadcast operations begin. We believe  that it is in the  public 
interest to  have broadcasters  adhere  to the  Commission's  EAS 
rules.8   Arnold  also  asserts  that  the  Bureau  imposed   the 
forfeiture for the EAS violation because Arnold failed to request 
a waiver of the EAS rules and not because operating KNEC  without 
EAS equipment is  a serious violation.   Although Arnold  further 
opines that it would most certainly have been granted a waiver of 
Section 11.35 had it sought one, the fact remains that Arnold did 
not seek, let alone  obtain, a waiver.  Similarly, the fact  that 
Arnold might have obtained Special Temporary Authority  (``STA'') 
to operate without  EAS equipment  is irrelevant, as  it did  not 
seek, let alone obtain, such authority.  

     6.   Arnold  also  takes  issue   with  the  $2,000   upward 
adjustment to the $8,000 base  forfeiture amount for the  Section 
11.35 EAS violation.  The Bureau based the upward adjustment upon 
the egregiousness  of the  violation,  given Mr.  Arnold's  prior 
service as a LECC chairman.  Arnold contends that it is  contrary 
to the  Commission's  Forfeiture  Policy  Statement  to  upwardly 
adjust the forfeiture amount for  this reason.  We agree that  an 
upward adjustment for this violation is unwarranted in this case.  
Accordingly, we will eliminate  the $2,000 upward adjustment  and 
reduce the total amount assessed for this violation to $8,000. 

The Section 73.1350(b) Violation

     7.   The Bureau assessed  Arnold a  total $4,000  forfeiture 
for  the  Section  73.1350(b)   violation  (failure  to  have   a 
transmitter  control  system  in  place  which  would  allow  the 
transmitter to  be shut  down within  three minutes  of an  event 
requiring shut down), which included  the $3,000 base amount  for 
this violation  and  a  $1,000  upward  adjustment.   The  Bureau 
adjusted the  forfeiture  amount  upward  by  $1,000  because  it 
considered the violation to  be particularly egregious given  the 
potential for  causing interference  to other  licensed  stations 
should KNEC begin operating outside its authorized limits with no 
way of  turning  the  transmitter off  within  three  minutes  in 
accordance with the Rules.  Arnold claims that the imposition  of 
a forfeiture for this violation of Section 73.1350(b) is contrary 
to established  Commission  policy and  inconsistent  with  other 
recent enforcement actions.  In  support, Arnold asserts that  34 
days after  the staff  issued  the NAL  for KNEC's  violation  of 
Section  73.1350(b),  the  Denver  Office  issued  a  Notice   of 
Violation to  Arnold  for  Station KFTM's  violation  of  Section 
73.1350(d) of  the Rules,  a  rule which  Arnold believes  to  be 
similar in purpose to Section 73.1350(b).9  In the case of  KFTM, 
however, the Commission took  no further enforcement action  once 
the violation was corrected.  

     8.   The  obligations  imposed  on  licensees  by   Sections 
73.1350(b) and 73.1350(d)  are both important  components of  the 
regulatory scheme  that ensures  interference free  broadcasting.  
However, the type  of potential problem  that Section  73.1350(b) 
contemplates is inherently more urgent  than the type of  problem 
addressed   by   Section   73.1350(d).    Specifically,   Section 
73.1350(b)  contemplates   those   circumstances   in   which   a 
transmitter is so  seriously malfunctioning  that the  Commission 
identifies  it  as  causing  harmful  or  catastrophic  loss   of 
telecommunications service.   Such  circumstances are  deemed  so 
critical that a  broadcaster must be  able to cease  broadcasting 
within three  minutes.  Section  73.1350(d), on  the other  hand, 
contemplates a situation that results in incremental  degradation 
of service, not  complete disruption of  service.  In these  less 
urgent circumstances,  the broadcaster  has greater  latitude  in 
addressing the  problem;  i.e.,  the rule  permits  a  correction 
period of  up to  three hours.   Given the  grave nature  of  the 
potential problems Section 73.1350(b) seeks to avoid, we conclude 
that the staff  properly exercised  its discretion  in issuing  a 
forfeiture to KNEC for  its violation of  the rule.  Further,  we 
find no inconsistency in that action and the subsequent  decision 
to issue only a Notice of Violation to KFTM for its violation  of 
Section 73.1350(d). 

     9.   Arnold also argues, however, that all violations of the 
transmitter control  rules  carry  with them  the  potential  for 
interference, and therefore, this potential is taken into account 
in the base forfeiture amount for transmitter control violations.  
For  this  reason,  Arnold   believes  that  the  $1,000   upward 
adjustment imposed for  violating this rule  should be set  aside 
absent a finding that Arnold's violation of the rule was, in some 
way, more egregious  than a  routine failure to  comply with  the 
rule.  We agree. Accordingly, based upon the facts of this  case, 
an upward  adjustment  to the  base  forfeiture amount  for  this 
violation is not warranted.       


The Section 73.1820 Violation

     10.  The Enforcement  Bureau's Forfeiture  Order included  a 
$1,000  forfeiture   amount  for   willfully  violating   Section 
73.1820(a) of the  Rules, which requires  entry into the  station 
log of each test  and activation of the  EAS and any entries  not 
specifically required by Section 73.1820(a), but required by  the 
instrument of authorization or elsewhere in Part 73 of the Rules.  
Arnold argues that although the Enforcement Bureau claims in  the 
reconsideration MO&O that it did not assess a separate forfeiture 
for Arnold's failure to log the EAS tests that it did not conduct 
and could not have conducted because it lacked the necessary  EAS 
equipment, this  is  not correct.   Arnold  points out  that  the 
reconsideration  MO&O  states  that  it  was  fined  $1,000   for 
violating Section 73.1820 and that the original Forfeiture  Order 
states that  Arnold violated  Section 73.1820(a)  by "failing  to 
make ... EAS logs available to FCC representatives upon request."  
Arnold further asserts that no other violation of Section 73.1820 
is cited in  either Order, therefore,  the $1,000 forfeiture  for 
violating Section 73.1820 can only be attributed to the fact that 
Arnold failed  to log  the EAS  tests that  it did  not  conduct.  
After reviewing the record, we conclude that it does not  support 
imposition of  a monetary  forfeiture  for violation  of  Section 
73.1820(a) of  the  Rules.   Accordingly,  we  reduce  the  total 
forfeiture amount by $1,000. 
               
                        ORDERING CLAUSES

     11.  ACCORDINGLY, IT IS  ORDERED that,  pursuant to  Section 
1.115(c) of the Rules, 47 C.F.R. 1.115(c), Arnold  Broadcasting 
Company, Inc.'s application for review of the Memorandum  Opinion 
and Order for NAL No. 915DV0001 IS GRANTED IN PART AND DENIED  IN 
PART.

     12.  IT IS FURTHER ORDERED that, pursuant to Section  503(b) 
of the Act, 47 U.S.C. 503(b), and Section 1.80 of the Rules, 47 
C.F.R. 1.80,  Arnold Broadcasting  Company, Inc.  must pay  the 
amount of ten thousand dollars ($10,000) within thirty (30)  days 
of the release date of this Order.  Payment may be made by  check 
or money order, drawn on a U.S. financial institution, payable to 
the Federal Communications  Commission.10  The remittance  should 
be marked ``NAL Acct. No. 915DV0001'' and mailed to the following 
address:

               Federal Communications Commission
               P.O. Box 73482
               Chicago, Illinois 60673?7482

Forfeiture penalties not paid within  30 days may be referred  to 
the U.S.  Attorney for  recovery in  a civil  suit. 47  U.S.C.   
504(a).
     
     






     13.  IT IS FURTHER ORDERED that  a copy of this Order  shall 
be sent by  certified mail, return?receipt  requested, to  Arnold 
Broadcasting  Company,  Inc.,  P.O.  Box  830,  803  West   Main, 
Sterling, Colorado  80751 and  to  its counsel  David  Tillotson, 
Esq., 4606 Charleston Terrace, N.W., Washington, DC  20007-1911.
  
                              FEDERAL COMMUNICATIONS COMMISSION

  

                              Magalie Roman Salas
                              Secretary
_________________________

     1   Arnold Broadcasting Company, Inc., 16 FCC Rcd 267 (Enf. 
Bur. 2001).

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

     3    47 C.F.R. 1.80, 11.35, 73.1350, 73.1820, 73.1870.     
     4
       Although the Enforcement Bureau determined that Arnold 
violated all of the aforementioned sections of the Rules, it held 
Arnold liable only for violating Sections 11.35, 73.1350, 
73.1820, and 73.1870, and issued a $16,000 forfeiture for 
violating only those sections.

     5 Arnold Broadcasting Company, Inc., 15 FCC Rcd 2704 (Enf. 
Bur. 2000). 
     6 The EAS equipment did not arrive before Arnold went on the 
air.  Arnold proceeded to broadcast without the equipment and 
without obtaining a waiver.
 
     7 The Commission's Forfeiture Policy Statement and Amendment 
to Section 1.80 of the Rules to Incorporate the Forfeiture 
Guidelines, 12 FCC Rcd 17087 (1997), recon. denied, 13 FCC Rcd 
303 (1999) ("Forfeiture Policy Statement").
 
     8  Section 11.35(a) provides that broadcast stations ... are 
responsible for ensuring that EAS Encoders, EAS Decoders and 
Attention Signal generating and receiving equipment used as part 
of the EAS are installed so that the monitoring and transmitting 
functions are available during the times the stations and systems 
are in operation. 
9    
      Section 73.1350(d) provides that:

          In the  event  that a  broadcast  station  is 
          operating  in  a  manner   that  is  not   in 
          compliance with the technical rules set forth 
          elsewhere in this  part or the  terms of  the 
          station authorization, and  the condition  is 
          not listed in paragraph (e) of this  section, 
          broadcast operation must be terminated within 
          three hours. 
          10
      Payment of the forfeiture in installments may be considered 
as a separate  matter in  accordance with Section  1.1914 of  the 
Rules, 47 C.F.R.  1.1914.  Requests for installment plans should 
be mailed to: Chief, Revenue & Receivables Operations Group,  445 
Twelfth Street, S.W., Washington, DC 20554.