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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
Petracom of Joplin, L.L.C. ) File No. EB-02-KC-
Licensee of Station KCAR-FM ) NAL/Acct. No.
Lutz, FL 33548 ) FRN 0005-0098-40
Adopted: April 2, 2004 Released:
April 6, 2004
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order (``Order''), we issue a
monetary forfeiture in the amount of three thousand, five
hundred dollars ($3,500) to Petracom of Joplin, L.L.C.
(``Petracom''), licensee of station KCAR-FM, Galena, Kansas,
for willful and repeated violations of Sections
11.61(a)(2)(i)(A) and 73.3526(a)(2) of the Commission's
Rules (``Rules'').1 The noted violations involve,
respectively, Petracom's failure to conduct weekly Emergency
Alert System (``EAS'') tests and to include
``issues/programs'' lists in the station's public file.
2. On December 12, 2002, the Commission's Kansas
City, Missouri Field Office (``Kansas City Office'') issued
a Notice of Apparent Liability for Forfeiture (``NAL'') 2 in
the amount of three thousand, five hundred dollars ($3,500).
Petracom filed a response to the NAL on January, 10, 2003.
3. On November 7, 2002, a Commission agent from the
Kansas City Office inspected the EAS installation and public
file for radio station KCAR-FM. The operator on duty at the
time of the inspection could not send an EAS test without
instruction from the station's engineer. After such
instruction and a successful EAS transmission, the agent
inspected the EAS log. The agent found that the most recent
log entry of an EAS test was dated July 22, 2002. The
station manager admitted to the agent that the station had
not conducted EAS tests since that date. The agent also
found that the station's public file contained no
``issues/programs'' lists. The station manager told the
agent that the station had no ``issues/programs'' lists,
though Petracom had owned KCAR-FM for over two years. Based
on the violations noted during the inspection, the Kansas
City Office issued Petracom an NAL for the noted violations
on December 12, 2002. On January 10, 2003, Petracom
submitted a response to the NAL, requesting cancellation of
the forfeiture claiming that the violations resulted from
employee error. Petracom also seeks cancellation based on
remedial measures taken, an inability to pay, and a history
of overall compliance.
4. The proposed forfeiture amount in this case was
assessed in accordance with Section 503(b) of the
Communications Act of 1934, as amended (``Act''),3 Section
1.80 of the Rules,4 and The Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Rules to
Incorporate the Forfeiture Guidelines (``Policy
Statement'').5 In examining Petracom'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.6
11.61(a)(2)(i)(A) of the Rules requires each AM, FM, and TV
station to conduct tests of the EAS Header and End of
Message Codes at least once a week at random days and times.
KCAR-FM's EAS log showed, and the station manager's
admission confirmed, that KCAR-FM failed to conduct the
required weekly EAS tests from July 22, 2002 to November 7,
2002. The field agent's test of the EAS equipment showed it
to be fully operational. Petracom, therefore, willfully7
and repeatedly8 failed to conduct the required tests
pursuant to 11.61(a)(2)(i)(A) of the Rules.
6. Section 73.3526(a)(2) of the Rules requires each
commercial AM and FM radio station to comply with Section
73.3526(e)(12), which in turn requires each station to
include in its public inspection file, every three months, a
list of programs that have provided the station's most
significant treatment of community issues during the
preceding three-month period. This ``issues/programs'' list
is required to be filed in the station's public inspection
file by the tenth day of the succeeding calendar quarter,
and the list should be retained in the station's public
inspection file until the Commission takes final action on
the station's next license renewal application. The
Commission's field agent found no ``issues/programs'' lists
in KCAR-FM's public inspection file. The station manager
told the field agent that there were no ``issues/programs''
lists, even though Petracom had owned the station for at
least two years. Petracom, therefore, willfully and
repeatedly violated Section 73.3526(a)(2) by not maintaining
``issues/programs'' lists in KCAR-FM's public inspection
7. In its response to the NAL, Petracom asserts that,
because the KCAR-FM station manager regularly certified to
Petracom that the station was in compliance with all
Commission rules, Petracom exercised proper diligence in
monitoring its station and the Commission should cancel
Petracom's forfeiture. Such monitoring of and certification
by employees does not warrant cancellation of the
forfeiture. ``The Commission has long held that licensees
and other Commission regulatees are responsible for the acts
and omissions of their employees and independent contractors
and has consistently refused to excuse licensees from
forfeiture penalties where actions of employees or
independent contractors have resulted in violations.''9
8. Petracom states in its response that, upon
receiving the NAL, Petracom terminated the former KCAR-FM
station manager, implemented new procedures to ensure
compliance with Commission rules, and corrected KCAR-FM's
violations. While commendable, these measures also do not
warrant cancellation of the forfeiture. As the Commission
stated in Seawest Yacht Brokers, ``corrective action taken
to come into compliance with Commission rules or policy is
expected, and does not nullify or mitigate any prior
forfeitures or violations.''10
9. Also in its NAL response, Petracom cites financial
hardship as a reason why the Commission should cancel the
forfeiture. Petracom submits copies of its financial
statements for fiscal years 2000 and 2001 in support of its
claim of inability to pay the proposed forfeiture amount.11
Though prepared in accordance with Generally Accepted
Accounting Practices (``GAAP''), the balance sheets Petracom
provides do not give an accurate picture of the company's
finances, because the balance sheets do not include gross
receipts.12 Even if Petracom had provided its gross
receipts, that would not necessarily be sufficient for us to
evaluate Petracom's ability to pay the forfeiture. The
entity before us in this proceeding is a subsidiary of
Petracom Media, L.L.C, which owns three broadcasting
companies. We must look to the totality of the
circumstances surrounding Petracom's ability to pay the
parent company's ability to pay, therefore, is relevant in
evaluating the subsidiary company's ability to pay the
forfeiture.13 The Commission would need to see tax returns
or GAAP-prepared balance sheets showing gross receipts from
the parent company to determine Petracom's ability to pay.14
Because Petracom has not provided adequate information to
enable us to evaluate its financial condition, we are unable
to cancel or reduce the forfeiture based on Petracom's claim
of an inability to pay.15
10. Petracom's final argument for canceling the
forfeiture is its claim of a history of overall compliance.
We do not think that Petracom is entitled to such a
reduction, however. Though the Commission has taken no
prior action against Petracom, the Commission has acted
against one of Petracom's sister companies, Petracom of
Texarkana, L.L.C. On May 2, 2003, the Commission's Dallas,
Texas Field Office issued an NAL to Petracom of Texarkana,
L.L.C. as licensee of FM Station KPGG, Dallas, Texas, for a
violation of Section 11.35(a) of the Rules (also an EAS
violation).16 Petracom of Texarkana L.L.C. is also a
subsidiary of Petracom Media, L.L.C. When a parent or
sister company has previously received notice of a violation
from the Commission, it is as if the company at issue has
received the notice, and the company at issue will not
qualify for a reduction based on a history of overall
compliance.17 We therefore reject Petracom's claim for a
reduction based on a history of overall compliance.
11. We have examined Petracom's response to the NAL
pursuant to the statutory factors above, and in conjunction
with the Policy Statement, as well. As a result of our
review, we conclude that Petracom willfully and repeatedly
violated Sections 11.61(a)(2)(i)(A) and 73.3526(a)(2) of the
Rules and that cancellation or reduction of the proposed
$3,500 monetary forfeiture is not warranted.
IV. ORDERING CLAUSES
12. Accordingly, IT IS ORDERED THAT, pursuant to
Section 503(b) of the Act18, and Sections 0.111, 0.311 and
1.80(f)(4) of the Rules19, Petracom of Joplin, L.L.C. IS
LIABLE FOR A MONETARY FORFEITURE in the amount of three
thousand, five hundred dollars ($3,500) for willfully and
repeatedly violating Sections 11.61(a)(2)(i)(A) and
73.3526(a)(2) of the Rules. For collection, the Commission
will file a proof of claim at the appropriate time in
Petracom's bankruptcy action.20
13. IT IS FURTHER ORDERED that a copy of this
Order shall be sent by Certified Mail Return Receipt
Requested to Petracom of Joplin, L.L.C. at 1527 N. Dale
Mabry Hwy, Suite 105, Lutz, FL 33548, and to Petracom's
counsel, M. Scott Johnson, Gardner, Carton & Douglas, 1301 K
St., N.W., Suite 900, East Tower, Washington D.C. 20005.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
11. 47 C.F.R. §§ 11.61(a)(2)(i)(A) and 73.3526(a)(2).
21. Notice of Apparent Liability of Forfeiture,
NAL/Acct. No. 200332560006 (Enf. Bur., Kansas City Office,
released December 12, 2002).
31. 47 U.S.C. § 503(b).
41. 47 C.F.R. § 1.80.
51. 12 FCC Rcd 17087 (1997), recon. denied, 15 FCC
Rcd 303 (1999) [hereinafter Policy Statement] .
61. 47 U.S.C. § 503(b)(2)(D).
7 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,' ... means the conscious and
deliberate commission or omission of such act,
irrespective of any intent to violate any provision of
this Act or any rule or regulation of the Commission
authorized by this Act ....'' See Southern California
Broadcasting Co., 6 FCC Rcd 4387 (1991).
81. 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, supra at 4388.
91. See, e.g. Eure Family Limited Partnership, 17 FCC
Rcd 21861, 21863-64 (2002) (internal quotation marks
omitted) and cases cited therein.
101. See 9 FCC Rcd 6099 (1994). See also Callais
Cablevision, Inc., 17 FCC Rcd 22626, 22629 (2002); Radio
Station KGVL, Inc., 42 FCC 2d 258, 259 (1973); and Executive
Broadcasting Corp., 3 FCC 2d 699, 700 (1966).
111. See Policy Statement, supra note 5 at 17158
(stating that the ``Commission has the flexibility to
consider any documentation [e.g., balance sheets,
profit/loss statement certified by the licensee] that it
considers probative, objective evidence of the violator's
inability to pay a forfeiture'') (brackets were parentheses
121. See PJB Communications of Virginia, Inc., 7
FCC Rcd 2088, 2089 (1992) (finding gross receipts a ``very
useful yardstick in helping to analyze a company's financial
condition for forfeiture purposes''). See also In re Alpine
Broadcasting, Station KKIT, 17 FCC Rcd. 18242, 18244 (Enf.
Bur. 2002) (stating, ``the best indication of a company's
ability to pay a forfeiture amount is its gross receipts'').
131. See In the Matter of KASA Radio Hogar, Inc.,
17 FCC Rcd 6256, 6258-59 (2002) (finding no reduced
forfeiture despite a claim of inability to pay, because the
licensee was a subsidiary of a company with the financial
means to pay the forfeiture).
141. See id. at 6257.
151. The FCC has received notice that Petracom
has filed for Chapter 11 bankruptcy. However, the filing
for bankruptcy does not necessarily preclude the imposition
of a forfeiture. See 11 U.S.C. § 362(b); see also United
States v. Commonwealth Companies, Inc., 913 F.2d 518, 522-26
(8th Cir. 1990) (excepting from bankruptcy imposed stays,
suits by government to obtain monetary judgment for past
violations of the law); Coleman Enterprises, Inc., 15 FCC
Rcd 24385, 24389 notes 27-28 (2000), recon. denied, 16 FCC
Rcd 10016 (2001) (noting that a bankruptcy filing does not
preclude the Commission from assessing forfeitures for
violations of the Act and Rules). Moreover, the filing for
bankruptcy does not necessarily justify an adjustment or
cancellation of the forfeiture amount for a violation of the
Rules. See Adelphi Communications, 18 FCC Rcd 7652, 7654 ¶
8 (Enf. Bur. 2003) (finding that a Chapter 11 bankruptcy
filing -- alone, without financial documentation -- does not
support an inability to pay claim and thus does not provide
a basis to adjust or cancel an assessed forfeiture); see
also North American Broadcasting Co., Inc., 19 FCC Rcd 2754
¶ 6 (Enf. Bur. 2004); Pinnacle Towers, Inc., 18 FCC Rcd
16365, 16366-67 ¶ 7 (Enf. Bur. 2003); Friendship Cable of
Texas, Inc., 17 FCC Rcd 8571, 8572-73 ¶ 9 (Enf. Bur. 2002).
161. See Notice of Apparent Liability of
Forfeiture, NAL/Acct. No. 200333500006 (Enf. Bur., Dallas,
Texas Office, released May 2, 2003).
171. See In re Mega Communications of St.
Petersburg, Licensee, L.L.C. 16 FCC Rcd 15948, 15949 (Enf.
Bur. 2001) (denying a subsidiary's claim of history of
overall compliance because the Commission had issued eight
NOVs to parent and sister companies). See also In the
Matter of Rio Grande Transmission, Inc. 16 FCC Rcd 17040,
17042-43 (Enf. Bur. 2001) (imposing a forfeiture against a
subsidiary $13,000 for a tower-related violation and
rejecting the subsidiary's claim of history of overall
compliance because the Commission had previously issued six
prior NOVs against the parent company for tower-related
181. 47 U.S.C. § 503(b).
191. 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
201. See Coleman Enterprises, Inc., supra at
24390. See also Commonwealth, supra at 523 note 15.