Click here for Adobe Acrobat version
Click here for Microsoft Word version
This document was converted from Microsoft Word.
Content from the original version of the document such as
headers, footers, footnotes, endnotes, graphics, and page numbers
will not show up in this text version.
All text attributes such as bold, italic, underlining, etc. from the
original document will not show up in this text version.
Features of the original document layout such as
columns, tables, line and letter spacing, pagination, and margins
will not be preserved in the text version.
If you need the complete document, download the
Microsoft Word or Adobe Acrobat version.
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
FNX Broadcasting, LLC ) File No. EB-02-BS-114
Licensee, WPHX(AM) ) NAL/Acct. No. 200332260001
Sanford, Maine ) FRN 0004 0757 35
Adopted: July 19, 2004 Released: July 22,
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order (``Order''), we issue a
monetary forfeiture in the amount of thirteen thousand six
hundred dollars ($13,600) to FNX Broadcasting, LLC (``FNX''),
licensee of radio station WPHX(AM), Sanford, Maine, for willful
and repeated violation of Sections 73.1125 and 73.3526(b) of the
Commission's Rules (``Rules'').1 The noted violations involve
FNX's failure to maintain a meaningful managerial and staff
presence at its main studio, and failure to maintain the public
inspection file at the main studio.
2. On October 29, 2002, the Commission's Boston,
Massachusetts Office (``Boston Office'') released a Notice of
Apparent Liability for Forfeiture (``NAL'') to FNX for a
forfeiture in the amount of seventeen thousand dollars
($17,000).2 FNX filed a response on November 29, 2002
(``Response to NAL''), seeking cancellation or reduction of the
3. On May 14, 2002, a Commission agent from the Boston
Office attempted to inspect radio station WPHX(AM). Unable to
locate WPHX(AM)'s main studio, the agent called the station's
local telephone number and spoke with Michael Waggoner, who was
at that time the station's General Manager. Mr. Waggoner stated
that the main studio was unstaffed. When the agent met with Mr.
Waggoner at the main studio, Mr. Waggoner stated that the main
studio had not been staffed ``since several months after FNX
purchased the station in 1999.'' Further, there were no
personnel present at the main studio. In response to the agent's
inquiry about the public inspection file, Mr. Waggoner brought
the file to the main studio when he met with the agent and
explained that the file was being kept at the station's Portland,
Maine office. On August 2, 2002, the Boston Office issued a
Notice of Violation (``NOV'') to FNX for a number of violations
at station WPHX(AM), including violation of Sections 73.1125 and
73.3526(b) of the Rules. In its August 26, 2003 response to the
NOV, FNX acknowledged its violations of Sections 73.1125 and
73.3526(b) of the Rules.
4. On October 29, 2002, the Boston Office issued the
subject NAL finding that FNX willfully and repeatedly violated
Sections 73.1125 and 73.3526(b) of the Rules. In its response to
the NAL, FNX contends that it was in substantial compliance with
the Commission's rules at the time of the inspection. FNX also
claims that the proposed forfeiture is excessive, the forfeiture
amount is redundant, and, contrary to the NAL's finding, the
violations were not egregious. FNX further asserts that it moved
promptly to come into compliance with the Commission's rules.
Finally, FNX claims that it has experienced net operating losses
at station WPHX(AM) and that imposition of the proposed
forfeiture will not serve the public interest.
5. The proposed forfeiture amount in this case was
assessed in accordance with Section 503(b) of the Communications
Act of 1934, as amended (``Act''),4 Section 1.80 of the Rules,5
and The Commission's Forfeiture Policy Statement and Amendment of
Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines (``Forfeiture Policy Statement'').6 In examining
FNX's response, Section 503(b) of the Act requires that the
Commission 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, ability
to pay, and such other matters as justice may require.7
6. Section 73.1125 of the Rules requires the licensee of a
broadcast station to maintain a main studio at one of the
following locations: (1) within the station's community of
license; (2) at any location within the principal community
contour of any AM, FM, or TV broadcast station licensed to the
station's community of license; or (3) within twenty-five miles
from the reference coordinates of the center of its community of
license. In adopting the main studio rules, the Commission
stated that the station's main studio must have the capability to
serve the needs and interests of the residents of the station's
community of license.8 To fulfill this function, a station,
among other things, must maintain a meaningful presence at its
main studio.9 The Commission has defined a minimally acceptable
``meaningful presence'' as full-time managerial and full-time
staff personnel.10 The licensee need not have the same staff
person and manager at the studio, as long as there is management
and staff presence there during normal business hours.11
Although management personnel need not be ``chained to their
desks'' during normal business hours, they must ``report at the
main studio on a daily basis, spend a substantial amount of time
there and ... use the studio as a home base.''12 At the time of
the inspection, there was no managerial or staff person present
or assigned to the main studio. Although station WPHX(AM)'s
Chief Engineer, Peter Vernaglia, signed a sworn statement
indicating that, at the time of the inspection, the General
Manager and Engineer of WPHX(AM) made ``regularly scheduled
visits'' to the main studio, these visits did not rise to the
level of that which is required to have a sufficient full-time
management and staff presence under Jones Eastern.13
7. Section 73.3526(a)(2)14 of the Rules provides that
broadcast stations shall maintain a public inspection file.
Section 73.3526(b) requires the public inspection file to be
maintained at the main studio of the station. At the time of the
inspection, station WPHX(AM)'s public inspection file was not
being kept at its main studio. It was being kept in FNX's
Portland, Maine office.
8. FNX does not dispute the violations in its response to
the NAL. Rather, FNX makes several arguments in support of its
request for cancellation or reduction of the forfeiture. FNX
asserts that station WPHX(AM) was in substantial compliance with
the Commission's rules at the time of the inspection. However,
we note that during the inspection, the station's then General
Manager, Michael Waggoner, told the investigating agent that the
station was unmanned and had not been staffed ``since several
months'' after FNX purchased WPHX(AM) in 1999. We also note
that, although two FNX employees were making ``regularly
scheduled'' visits to the main studio, there is no evidence that
these visits came close to comporting with Jones Eastern's
requirement of having a full-time management and staff presence
at the main studio. FNX has not, for example, suggested that the
employees ``regular'' visits were daily. Thus, there is no
justification for cancellation or a reduction here on the basis
that FNX substantially complied with the rule and that the
violation was a ``minor'' main studio rule violation. Similarly,
although FNX did maintain a public inspection file for station
WPHX(AM) at its corporate office, by failing to keep WPHX(AM)'s
public inspection file where it is required to be kept - at
WPHX(AM)'s main studio -- we conclude that it was not in
substantial compliance such that the forfeiture should be
cancelled or reduced because the violation was a ``minor'' public
9. FNX further claims that the proposed amount of the
forfeiture is excessive, the forfeiture amounts for the same
violations at both WPHX-FM and WPHX (AM) is redundant, and,
contrary to the NAL's finding, the violations were not egregious.
We note that the forfeiture amounts proposed for each violation
at station WPHX(AM), $7,000 for the main studio violation and
$10,000 for the public file violation, are the base forfeiture
amounts indicated in the Forfeiture Policy Statement and Section
1.80(b)(4) of the Rules15 for the cited violations. The fact
that the NAL described the violations as ``egregious'' is
irrelevant since the NAL made no upward adjustment to the base
forfeiture amount. However, we note that, whereas the NAL found
the violations to be egregious, we do not find any justification
for such a finding. We believe the base amounts here are
appropriate and, as discussed above, no reductions are warranted.
Further, the forfeitures are not redundant because FNX admittedly
had two fully equipped main studios,16 both of which were found
to be inadequately staffed during the inspection. Therefore, two
separate forfeiture assessments for two separate violations of
Section 73.1125 of the Rules are appropriate. Moreover, the
rules require a station's public inspection file to be kept at
the station's main studio. Neither WPHX(AM)'s nor WPHX-FM's
public inspection file was maintained at the main studio at the
time of the inspection. Therefore, two separate forfeiture
assessments for two violations of Section 73.3526(b) of the Rules
10. FNX asserts that it moved promptly to come into
compliance with the Commission's rules and cites Duchossois
Communications Co. of Maryland, Inc, 78 RR 2d 1223, 1231 (1995)17
for the proposition that ``[t]he Commission has held that prompt
compliance after notification of a rule violation will be given
consideration in mitigation of any sanctions that may be imposed
upon a licensee.'' We do not read Duchossois to stand for this
proposition. Duchossois was reviewed by the Commission as an
application for review of the former Mass Media Bureau's grant of
an Application for Assignment of License and Sale of the Assets
of Station WHFS(FM). In the decision, the Commission stated that
it agreed with the Mass Media Bureau that ``the violations, while
serious, do not, taken individually or as a whole, rise to the
level which would require an evidentiary hearing.''18 It
concurred with the Mass Media Bureau that ``[Duchossois's]
stewardship of WHFS, while certainly not commendable,'' was not
``conducted in an exceedingly careless, inept and negligent
manner and that the licensee is either incapable or unwilling to
correct the operating deficiencies ....''19 The Commission then
noted that Duchossois had taken steps to correct many of the
admitted violations to support its conclusion that Duchossois was
not unwilling to correct operating deficiencies and thus
qualified to be a licensee, not to indicate that prompt
compliance after notification of a rule violation will be given
consideration in mitigation of a forfeiture that may be imposed
upon a licensee. Indeed, the Commission's consistent position on
remedial actions taken to correct violations is that they are
commendable but they are not mitigating factors in the forfeiture
11. FNX states that it has experienced substantial net
operating losses at station WPHX(AM). However, as the NAL
states, in order for the Commission to consider a claim of
inability to pay, the petitioner must submit: (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.21 Although FNX has provided a
declaration from its Chief Engineer, which includes some
projected financial information for the station, it has not
provided sufficient information to establish FNX's inability to
pay the forfeiture.
12. Finally, FNX asserts that imposition of the proposed
forfeiture will not serve the public interest given the
improvements it has made to the stations. However, we believe
that it is in the public interest to hold licensees accountable
for non-compliance with the Commission's rules.
13. As a final matter, we note that the NAL found FNX to
have a history of overall compliance with the Commission's rules,
however, the NAL made no downward adjustment to reflect that
determination. We therefore reduce the $17,000 forfeiture amount
to $13,600 to reflect FNX's history of overall compliance with
the Commission's rules.
IV. ORDERING CLAUSES
14. Accordingly, IT IS ORDERED that, pursuant to Section
503(b) of the Act, and Sections 0.111, 0.311 and 1.80(f)(4) of
the Rules,22 FNX Broadcasting, LLC IS LIABLE FOR A MONETARY
FORFEITURE in the amount of thirteen thousand six hundred dollars
($13,600) for willful23 and repeated24 violation of Sections
73.1125 and 73.3526(b) of the Rules at station WPHX(AM).
15. Payment of the forfeiture shall be made in the manner
provided for in Section 1.80 of the Rules within 30 days of the
release of this Order. If the forfeiture is not paid within the
period specified, the case may be referred to the Department of
Justice for collection pursuant to Section 504(a) of the Act.25
Payment may be made by mailing a check or similar instrument,
payable to the order of the Federal Communications Commission, to
the Federal Communications Commission, P.O. Box 73482, Chicago,
Illinois 60673-7482. The payment should reference NAL/Acct. No.
200332260001 and FRN 0004 0757 35. Requests for full payment
under an installment plan should be sent to: Chief, Revenue and
Receivables Group, 445 12th Street, S.W., Washington, D.C.
16. IT IS FURTHER ORDERED that a copy of this Order shall
be sent by First Class and Certified Mail Return Receipt
Requested to FNX Broadcasting, LLC, c/o James L. Winston, Esq.,
Rubin, Winston, Diercks, Harris, Cooke, L.L.P, 1155 Connecticut
Avenue, NW, Washington, DC 20036.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 47 C.F.R. §§ 73.1125 and 73.3526(b).
2 See Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200332260001 (Enf. Bur., Boston Office, October 29, 2002).
3 The Boston Office issued two NALs to FNX for the same
violations at WPHX(AM) and WPHX-FM. FNX filed a consolidated
4 47 U.S.C. § 503(b).
5 47 C.F.R. § 1.80.
6 12 FCC Rcd 17087 (1997), recon. denied, 15 FCC Rcd 303 (1999).
7 47 U.S.C. § 503(b)(2)(D).
8 Main Studio and Program Origination Rules, 2 FCC Rcd 3215,
3217-18 (1987), clarified, 3 FCC Rcd 5024, 5026 (1988).
10 Jones Eastern of the Outer Banks, Inc., 6 FCC Rcd 3615, 3616
(1991), clarified, 7 FCC Rcd 6800 (1992).
11 6 FCC Rcd at 3616 n.2; 7 FCC Rcd at 6800 n.4.
12 7 FCC Rcd at 6802.
13 According to the sworn declaration of station WPHX(AM)'s Chief
Engineer, Peter Vernaglia, immediately after the inspection, a
temporary full-time person was placed at the main studio and by
August 26, 2002, station WPHX(AM) had a full-time Business
Manager working at the station daily during normal business
hours. In addition, the General Manager and sales staff are
assigned to work out of the main studio on a rotating basis, such
that each day, either the General Manager or a sales person
spends some portion of their work day at the main studio.
14 47 C.F.R. § 73.3526(a)(2).
15 47 C.F.R. § 1.80(b)(4).
16 Response to NAL at page 4.
17 10 FCC Rcd 6688 (1995).
18 Id. at 6694.
20 See, e.g., AT&T Wireless Services, Inc., 17 FCC Rcd 21866,
21871 (2002); Seawest Yacht Brokers, 9 FCC Rcd 6099 (1994);
Station KGVL, Inc., 42 FCC 2d 258, 259 (1973).
21 See NAL at para. 13.
22 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
23 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 4387-88 (1991).
24 As provided by 47 U.S.C. § 312(f)(2), a continuous violation
is ``repeated'' if it continues for more than one day. The
Conference Report for Section 312(f)(2) indicates that Congress
intended to apply this definition to Section 503 of the Act as
well as Section 312. See H.R. Rep. 97th Cong. 2d Sess. 51
(1982). See Southern California Broadcasting Company, 6 FCC Rcd
4387, 4388 (1991) and Western Wireless Corporation, 18 FCC Rcd
10319 at fn 56 (2003).
25 47 U.S.C. § 504(a).
26 See 47 C.F.R. § 1.1914.