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


In the Matter of                        )         File  No.:  EB-
01-DV-044
                              )         NAL/Acct.             No. 
                         200332800004
Pilgrim Communications, Inc.                 )                        
FRN 0006-1472-19
Licensee, KSKE(AM)                 )
Vail, Colorado                     )

                  MEMORANDUM OPINION AND ORDER

     Adopted:  August 26, 2005               Released:  September 
2, 2005  

By the Acting Chief, Enforcement Bureau:

I.   INTRODUCTION

     1.   In this  Memorandum Opinion and  Order (``Order''),  we 
          deny  the petition  for reconsideration  (``petition'') 
          filed  by Pilgrim  Communications, Inc.  (``Pilgrim''), 
          licensee   of  Station   KSKE(AM),   Vail,   Colorado.1  
          Pilgrim seeks reconsideration of the Forfeiture  Order2 
          in which  the Chief,  Enforcement Bureau  (``Bureau''), 
          found  it  liable for  a  monetary  forfeiture  in  the 
          amount of  $11,000 for willful  and repeated  violation 
          of  Section   73.1125(a)  of  the  Commission's   Rules 
          (``Rules'')   and   willful   violation   of   Sections 
          73.1560(a) and 73.1745(a) of the Rules.3  

II.       BACKGROUND

     2.   On November 20, 2002, the Commission's Denver, 
          Colorado Field Office (``Denver Office'') issued a 
          Notice of Apparent Liability for Forfeiture (``NAL'')4 
          in the amount of $11,000 to Pilgrim.  The NAL was 
          based on findings by the Denver Office that Pilgrim 
          violated Section 73.1125(a) of the Rules by failing to 
          maintain the requisite main studio presence at Station 
          KSKE.  The Denver Office also found that on May 9, 
          2001, Pilgrim did not reduce Station KSKE's power at 
          sunset to the level required by the station 
          authorization and operated with power exceeding KSKE's 
          authorized nighttime power level. 

     3.   Pilgrim responded to the NAL on January 21, 2003 and 
          supplemented its response on February 20, 2003.  On 
          May 19, 2004, the Bureau issued the subject Forfeiture 
          Order in which it upheld the NAL.  On June 18, 2004, 
          Pilgrim filed a petition for reconsideration of the 
          Forfeiture Order.  In its petition, Pilgrim challenges 
          the Bureau's finding in the Forfeiture Order that it 
          failed to maintain a main studio for Station KSKE.  
          Further, Pilgrim challenges and requests 
          reconsideration of the Bureau's finding that neither 
          cancellation nor reduction of the forfeiture is 
          warranted.  In support of its request, Pilgrim notes 
          PJB Communications of Virginia, Inc.,5 and cites to 
          language therein stating that ``in some cases, other 
          financial indicators such as net losses, may be 
          relevant.6  Pilgrim notes that it stopped keeping 
          separate accounting records for KSKE since it was 
          showing no income and combined its expenses into the 
          records of KLMO.  Pilgrim asserts that the Bureau 
          failed to give adequate weight to this information.  
          Pilgrim also cites Renaissance Radio, Inc.,7 in 
          further support of its request for cancellation or 
          reduction of the forfeiture.       

III.      DISCUSSION

     4.The forfeiture amount in this case was assessed in 
accordance with Section 503(b) of the Communications Act of 1934 
as amended (``Act''), 8 Section 1.80 of the Rules,9 and The 
Commission's Forfeiture Policy Statement and Amendment of Section 
1.80 of the Rules to Incorporate the Forfeiture Guidelines.10  In 
examining Pilgrim'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.11  

     5.   Pilgrim seeks reversal of the Bureau's conclusion that 
it had no main studio for Station KSKE claiming in a declaration 
by Ron Crider, Director of Engineering, that it ``maintained a 
fully operational main studio for the station at all times.''  
Although Pilgrim claims to have had a main studio, we note that 
when the investigating agent attempted to inspect Station KSKE, 
he found what appeared to be storage space at the address of 
KSKE's main studio.  The agent found no indication that there was 
a studio at the location.  Employees at adjacent businesses were 
not aware that KSKE supposedly had a main studio at that 
location.  The telephone number listed in the phone book for 
Station KSKE had been disconnected and no alternative phone 
number could be obtained from directory assistance.  Moreover, 
during a telephone conversation with Pilgrim corporate office 
staff, the agent was informed no Pilgrim personnel were in the 
Vail, Colorado area for Station KSKE.  We believe these facts 
support the conclusion that there was no main studio located at 
the address indicated as Station KSKE's main studio, and 
contradict Crider's declaration.  However, we need not reach the 
question as to whether there was actually a main studio, since 
the violation of Section 73.1125(a) was premised on the absence 
of full-time staff and management personnel at Station KSKE 
during normal business hours.12  In response to paragraph 14 of 
the Forfeiture Order, Pilgrim now states that ``there is a full-
time managerial presence at the KSKE main studio,'' however, it 
failed to establish in either its response to the NAL or petition 
for reconsideration that there was a management level person 
employed at the station at the time of the inspection.  
Accordingly, there is no basis for reversal of the ultimate 
finding in the Forfeiture Order that Pilgrim violated Section 
73.1125(a).
   
     6.Regarding Pilgrim's inability to pay claim, the general 
rule of PJB is that a licensee's gross revenues are the best 
indicator of its ability to pay a forfeiture.13  The Bureau 
followed that rule in the Forfeiture Order when it averaged 
Pilgrim's gross revenues over a three-year period and compared 
that amount to the forfeiture amount.  As a result, the Bureau 
determined that the percentage of gross revenues represented by 
the forfeiture amount was within a range generally considered to 
be payable.14  While it is true that PJB recognizes that in some 
cases other financial indicators such as net losses may be 
relevant, it is not generally the case that net losses alone will 
mandate cancellation or reduction of a forfeiture.  As a matter 
of fact, PJB goes on to point out that if gross revenues are 
sufficiently great, the mere fact that a business is operating at 
a loss does not itself mean that it can not afford to pay a 
forfeiture.15  In Renaissance, the case cited by Pilgrim, the 
Bureau considered Renaissance's financial statements as well as 
its bankruptcy filing in determining that Renaissance could not 
pay the forfeiture.  Here, we do not have such a severe financial 
situation that it has resulted in a bankruptcy filing.  Moreover, 
Pilgrim has significant gross revenues in all three of the years 
that its financial documentation was reviewed and, when 
depreciation is added back, net income in two of those years.  
Moreover, even though Pilgrim stopped accounting for KSKE 
separately and combined its expenses into the accounting records 
of KLMO, that fact has no impact upon the Bureau's decision 
regarding Pilgrim's ability to pay the forfeiture because the 
Bureau evaluated the financial records of Pilgrim Communications, 
Inc.  That review would have included the financial condition of 
all of the holdings of Pilgrim Communications, Inc., including 
that of Stations KLMO and KSKE.  

IV.    ORDERING CLAUSES

     7.   Accordingly, IT IS ORDERED that, pursuant to Section 
405 of the Act16 and Section 1.106 of the Rules,17 Pilgrim 
Communications, Inc.'s petition for reconsideration of the May 
19, 2004 Forfeiture Order IS hereby DENIED.

     8.   IT IS ALSO ORDERED that, pursuant to Section 503(b) of 
the Act, and Sections 0.111, 0.311 and 1.80(f)(4) of the Rules,18 
Pilgrim Communications, Inc., IS LIABLE FOR A MONETARY FORFEITURE 
in the amount of eleven thousand dollars ($11,000) for willful 
and repeated violation of Section 73.1125(a) of the Rules and 
willful violation of Sections 73.1560(a) and 73.1745(a) of the 
Rules.

     9.Payment of the forfeiture shall be made in the manner 
provided in Section 1.80 of the Rules within 30 days of the 
release of the 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.19  
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 bycheck or money order may be 
mailed to Federal Communications Commission, P.O. 
Box358340,Pittsburgh, PA 15251-8340. Payment by overnight mail 
may be sent toMellon Bank/LB358340,500 Ross Street, Room 
1540670, Pittsburgh, PA 15251. Payment by wire transfer may be 
made to ABA Number043000261, receiving bankMellon Bank, and 
account number911-6106.

     10.       IT IS FURTHER ORDERED that this Order shall be 
sent by regular mail and by certified mail, return receipt 
requested, to Pilgrim's counsel, Christopher L. Robbins, Esq., 
Wiley, Rein, and Fielding LLP, 1776 K Street, NW, Washington, DC  
20006.

                         FEDERAL COMMUNICATIONS COMMISSION       

                         Kris Anne Monteith
                         Acting Chief, Enforcement Bureau
_________________________

1 Pilgrim filed  a consolidated petition  for reconsideration  to 
encompass the instant Forfeiture  Order and the Forfeiture  Order 
issued to it  for violations  at Station  KWYD(AM).  See  Pilgrim 
Communications, Inc.,  19  FCC Rcd  8881  (Enf. Bur.  2004).   We 
address  the  arguments  raised  regarding  KWYD  in  a  separate 
Memorandum Opinion and Order.

2  Pilgrim Communications, Inc., 19 FCC Rcd 8877 (Enf. Bur. 
2004). 

3 47 C.F.R.  73.1125(a), 73.1560(a), and 73.1745(a).

4 Notice  of Apparent  Liability  for Forfeiture,  NAL/Acct.  No. 
200332800004 (Enf. Bur., Denver Office, November 20, 2002). 

5 PJB Communications of Virginia, Inc., 7 FCC Rcd 2088 (1992). 



6 Id. at 2089.

7 19 FCC Rcd 10494 (Enf. Bur., 2004).

8 47 U.S.C.  503(b).

9 47 C.F.R.  1.80.

10 12  FCC Rcd.  17087 (1997),  recon. denied,  15 FCC  Rcd.  303 
(1999).

11 47 U.S.C.  503(b)(2)(D).

12 Jones Eastern of the Outer Banks, Inc., 6 FCC 2d 3615, 3616 
and n. 2, clarified 7 FCC Rcd 6800 (1992).

13 PJB at 2089. 

14  Id.  at  2089  (forfeiture  not  deemed  excessive  where  it 
represented approximately 2.02  percent of  the violator's  gross 
revenues); Hoosier  Broadcasting Corporation,  15 FCC  Rcd  8640, 
8641 (Enf. Bur. 2002) (forfeiture  not deemed excessive where  it 
represented approximately  7.6 percent  of the  violator's  gross 
revenues); Afton Communications Corp., 7 FCC Rcd 6741 (Com.  Car. 
Bur. 1992) (forfeiture not deemed excessive where it  represented 
approximately 3.9 percent of the violator's gross revenues).  

15 Id. at 2089.

16 47 U.S.C.  405.

17 47 C.F.R.  1.106.

18 47 C.F.R.  0.111, 0.311, 1.80(f)(4).

19 See 47 U.S.C.  504(a).