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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No.: EB-
) NAL/Acct. No.
SM Radio, Inc. )
Licensee of KUOL(AM) )
San Marcos, Texas )
MEMORANDUM OPINION AND ORDER
Adopted: December 22, 2004 Released: December 28,
By the Chief, Enforcement Bureau:
1. In this Memorandum Opinion and Order (``Order''), we
grant in part and deny in part the petition for
reconsideration filed by SM Radio, Inc. (``SM
Radio''), licensee of Station KUOL(AM), San Marcos,
Texas. SM Radio seeks reconsideration of the
Forfeiture Order1 in which the Chief, Enforcement
Bureau (``Bureau''), found it liable for a monetary
forfeiture in the amount of $7,000 for willful
violation of Section 73.1125 of the Commission's Rules
(``Rules'').2 The noted violation involves SM Radio's
failure to maintain a main studio presence within its
community of license.
2. On October 28, 2003, an agent from the Commission's
Dallas, Texas Office (``Dallas Office'') attempted to
inspect the main studio of Station KUOL. A building
located at the station's tower site appeared to be the
station's studio; however, the building was locked,
unattended, and appeared to be abandoned. Also on
October 28, 2003, the agent spoke with SM Radio's
technical representative who advised the agent that
the building at the tower site was KUOL's main studio.
SM Radio's technical representative also informed the
agent that the only personnel staffing the studio was
an unpaid volunteer from a local church who was
available to travel to the studio if requested.
3. On December 19, 2003, the Dallas Office issued a Notice of
Apparent Liability for Forfeiture (``NAL'') to SM Radio in the
amount of seven thousand dollars ($7,000) for the apparent main
studio violation.3 On April 5, 2004, believing that SM Radio had
not filed a response to the NAL, the Bureau issued a Forfeiture
Order to SM Radio upholding the NAL. On May 5, 2004, SM Radio,
by its attorney, filed a petition for reconsideration
(``petition'') of the Forfeiture Order, which it supplemented on
June 17, 2004.4 In its petition, SM Radio does not contest the
violations; however, it seeks reconsideration of the Forfeiture
Order, citing its inability to pay and its history of compliance
with the Commission's Rules. In support of its request for
reconsideration, SM Radio submits financial documentation for the
year ended June 30, 2003. SM Radio also cites to two cases in
which reductions were granted based upon the licensee's inability
to pay the forfeiture: Kenneth Paul Harris, 15 FCC Rcd 23991
(Enf. Bur. 2000) (forfeiture reduced from 18% to 4.5% of gross
receipts) and Hill Country Radio, Inc., 14 FCC Rcd 17708 (MMB
1999) (forfeiture of approximately 12% reduced to approximately
4.5% of gross revenues). We do not reach the cases cited by SM
Radio in support of its request for reconsideration because of
the reasons discussed below.
4. The forfeiture amount in this case was assessed in
accordance with Section 503(b) of the Communications Act
of 1934 as amended (``Act''), 5 Section 1.80 of the
Rules,6 and The Commission's Forfeiture Policy Statement
and Amendment of Section 1.80 of the Rules to Incorporate
the Forfeiture Guidelines.7 In examining SM Radio's
petition, 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 any other such
matters as justice may require.8
5. The Commission has determined that, in general, a
licensee's gross revenues are the best indicator of its ability
to pay a forfeiture.9 The Commission has also concluded that it
is appropriate to take into account ``income derived from other
affiliated operations, as well as the financial status of the
station(s) in question.''10 As the Common Carrier Bureau stated
in Hinton Telephone Company of Hinton, Oklahoma:
reviewing the data for consolidated operations rather
than financial data limited to just [one station]
accurately portrays whether a licensee can pay a
proposed forfeiture. Our determination of a licensee's
ability to pay should reflect whether the licensee in
general is financially capable of paying a forfeiture,
not whether financial data from a limited portion of
its operations can sustain a forfeiture.
7 FCC Rcd 6643, 6644 (CCB 1992), review denied, 8 FCC Rcd 5176
(1993). Thus, it is the Commission's general policy to consider
the financial condition of a licensee's consolidated operations,
not just the financial condition of an individual station or a
limited portion of its operations.
6. In support of its request for reconsideration, SM Radio
has submitted only its own financial documentation. However, we
note that there are several affiliated licensee entities whose
gross revenues are also relevant to the issue of whether SM Radio
can pay the proposed forfeiture because the entities share common
ownership with SM Radio. Paulino Bernal is the 100% owner of SM
Radio, Inc., Paulino Bernal Evangelism (``PBE''), La Radio
Cristiana Network, Inc. (``LRCN''), and Consolidated Radio, Inc.
(``CRI''). Paulino Bernal is also the individual licensee of AM
broadcast Stations KCLR, Ralls, Texas, and KUBR, San Juan, Texas,
as well as FM broadcast Stations KJAV, Alamo, Texas; KMFM,
Premont, Texas; and KPBM, McCamey, Texas. Consistent with
Commission policy, we will not make a determination that SM Radio
can not pay the proposed forfeiture without first considering the
gross revenues of the entities affiliated with SM Radio. Because
SM Radio has not provided any information concerning the revenues
of the several entities affiliated with it, we have no
justification for reducing the forfeiture based upon SM Radio's
claim of inability to pay the forfeiture. Although SM Radio
claims that imposition of the forfeiture would limit its ability
to generate programming in the public interest, the Commission
has held that, consistent with its holding in PJB Communications,
it will not find that a forfeiture will threaten a licensee's
ability to serve the public unless a comparison of the forfeiture
amount with the licensee's gross receipts shows that such a
threat exists.11 In this case, we can not make such a comparison
because the inquiry would also require the inclusion of the gross
receipts of affiliated entities, which have not been provided.
However, having found that SM Radio does have a history of
compliance with the Commission's Rules, we believe a reduction of
the forfeiture to $5,600 is warranted.
V. ORDERING CLAUSES
7. Accordingly, IT IS ORDERED that, pursuant to Section
405 of the Act12 and Section 1.106 of the Rules,13 SM Radio's
petition for reconsideration of the April 5, 2004 Forfeiture
Order IS hereby GRANTED IN PART to the extent discussed above and
DENIED in all other respects.
8.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.14
Payment of the forfeiture must be made by check or similar
instrument, payable to the order of the ``Federal Communications
Commission.'' The payment must include the NAL/Acct. No. and FRN
No. referenced above. Payment by check or money order may be
mailed to Forfeiture Collection Section, Finance Branch, Federal
Communications Commission, P.O. Box 73482, Chicago, Illinois
60673-7482. Payment by overnight mail may be sent to Bank One/LB
73482, 525 West Monroe, 8th Floor Mailroom, Chicago, IL 60661.
Payment by wire transfer may be made to ABA Number 071000013,
receiving bank ``Bank One,'' and account number 1165259.
Requests for full payment under an installment plan should be
sent to: Chief, Revenue and Receivables Operations Group, 445
12th Street, S.W., Washington, D.C. 20554.15
9. IT IS FURTHER ORDERED THAT this Order shall be
sent by regular mail and by certified mail, return receipt
requested, to SM Radio, Inc., P.O. Box 252, McAllen, Texas 78502,
and to its counsel, Barry D. Wood, Esq., 1827 Jefferson Place,
NW, Washington, DC 20036.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 19 FCC Rcd 6155 (Enf. Bur. 2004).
2 47 C.F.R. §§ 73.1125.
3 Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200232500002 (Enf. Bur., Dallas Office, December 19, 2003). An
erratum was released on January 9, 2004, which corrected the NAL
to indicate that the NAL/Acct. No. is 200432500002.
4 In its petition, SM Radio points out that it had, indeed, filed
a timely response to the NAL and provided a stamped copy of the
5 47 U.S.C. § 503(b).
6 47 C.F.R. § 1.80.
7 12 FCC Rcd. 17087 (1997), recon. denied, 15 FCC Rcd. 303
8 47 U.S.C. § 503(b)(2)(D).
9 PJB Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089
10 Emery Telephone, 13 FCC Rcd 23854, 23859-60 (1998) (emphasis
added), recon. denied, 15 FCC Rcd 7181 (1999).
11 KASA Radio Hogar, 17 FCC Rcd 6256, 6259 (2002); Emery
Telephone at 7185.
12 47 U.S.C. § 405.
13 47 C.F.R. § 1.106.
14 47 U.S.C. § 504(a).
15 See 47 C.F.R. § 1.1914.