Click here for Adobe Acrobat version
Click here for Microsoft Word version

******************************************************** 
                      NOTICE
********************************************************

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.

*****************************************************************



                           Before the
                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
                                )


                        FORFEITURE ORDER

     Adopted:  July 19, 2004                 Released:  July 22, 
     2004  

By the Chief, Enforcement Bureau:

                        I.   INTRODUCTION

     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 
forfeiture.3    

                        II.  BACKGROUND

     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.        

                        III.  DISCUSSION

     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 
file violation.    

     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 
are appropriate.  

     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 
context.20

     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. 
20554.26  

     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 
response. 
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).
9 Id.
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.
19 Id. 
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.