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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) File Number EB-03-DV-137
Mallard Cablevision, LLC )
Former Operator of Cable ) NAL/Acct. No.200432800002
Television System )
Community Unit No. WY0087 ) FRN 0009072752
Physical ID No. 004758 )
MEMORANDUM OPINION AND ORDER
Adopted: March 9, 2005
Released: March 11, 2005
By the Assistant Chief, Enforcement Bureau:
1. In this Memorandum Opinion and Order (``Order''),
we cancel a monetary forfeiture in the amount of $8,000
proposed against Mallard Cablevision, LLC ("Mallard"),
former operator of the above-captioned cable television
system in Pinedale, Wyoming, for its apparent willful and
repeated operation of a cable system in violation of the
cable signal leakage standards as set forth in Sections
76.605(a)(12) and 76.611(a)(1) of the Commission's Rules
("Rules").1 While we cancel the forfeiture for a
demonstrated inability to pay, we admonish Mallard for its
willful and repeated violation of Sections 76.605(a)(12) and
76.611(a)(1) of the Commission's Rules.
2. On June 8, 2003, an agent from the
Commission's Denver Office inspected a portion of Mallard's
cable system serving Pinedale, Wyoming, to identify leaks
and determine compliance with the Commission's basic signal
leakage criteria. The agent identified and measured one
leak and based on the measurement of this single leak,2 the
agent calculated the system's Cumulative Leakage Index
("CLI") at a value of 72.7, exceeding the allowable
cumulative signal leakage performance criteria of 64.3
Because of this leak, the agent contacted Mallard cable
technicians on June 8, 2003, and orally ordered Mallard to
cease operation on aeronautical band frequencies or
alternatively, reduce the amplitude of all signals on these
frequencies until the leaks were repaired and the system
complied with the basic signal leakage criteria.4 The
Denver Office followed the oral order with a written Order
to Cease Operations, delivered by facsimile on June 9,
2003.5 In accordance with the Order to Cease Operations,
Mallard was required to complete an inspection of the
system's cable plant, make the necessary repairs to bring
the system into compliance, and submit a report of their
findings. On June 10, 2003, Mallard responded to the Order
to Cease Operations indicating that over eighteen additional
signal leaks were reported that exceeded the basic signal
leakage criteria.6 Two of the leaks measured were of such
magnitude that each leak, taken alone, would cause the
system to exceed the allowable cumulative signal leakage
performance criteria of 64.7
3. On May 25, 2004, the Denver Office issued a Notice
of Apparent Liability for Forfeiture (``NAL'') to Mallard in
the amount of $8,000 for its apparent willful and repeated
operation of a cable system in violation of the cable signal
leakage standards as set forth in Sections 76.605(a)(12) and
76.611(a)(1) of the Commission's Rules.8 Mallard filed a
response to the NAL on June 24, 2004.9 In its Response,
Mallard does not contest the facts in the NAL concerning the
system's signal leakage issues. Instead, Mallard states
that it filed for Chapter 11 bankruptcy protection on May 9,
2003 and obtained confirmation of its Chapter 11 plan of
liquidation on February 13, 2004. Mallard states that it
has sold substantially all of its assets, including the
above-captioned system, which it sold to LB Cable LLC on
February 2, 2004. Mallard further states that it ``no
longer operates an ongoing business and is instead winding
down its affairs . . . .''10 Mallard argues that it has no
gross revenues from which to judge its ability to pay
because the only remaining funds are those resulting from
the sale of Mallard's assets, which have been or are in the
process of being distributed in accordance with the court-
approved ``Plan of Liquidation.'' In addition, Mallard
argues that its bankrupt status should serve as grounds for
cancellation of the forfeiture, given the fact that Mallard
no longer retains control over the cable system cited in the
NAL. Further, Mallard argues that it would not be in the
public interest for the bankruptcy court to allow payment of
the forfeiture out of the bankrupt estate because payment of
the forfeiture would diminish the size of the estate and the
amount of money available to other creditors who have no
connection to the signal leakage violation. Finally,
Mallard argues the Commission is barred from making a claim
against the estate because ``the opportunity for asserting
certain post-administrative expenses, those arising after
May 9, 2003, expired on March 31, 2004.''11
4. The proposed forfeiture amount in this case was
assessed in accordance with Section 503(b) of the Act,12
Section 1.80 of the Commission's Rules (``Rules''),13 and
The Commission's Forfeiture Policy Statement and Amendment
of Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, 12 FCC Rcd 17087 (1997), recon. denied, 15 FCC
Rcd 303 (1999) (``Forfeiture Policy Statement''). In
examining Mallard'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 other such
matters as justice may require.14
5. Section 76.611(a)(1) of the Rules requires a cable
system to limit its CLI to a value at or below 64.15
Section 76.605(a)(12) of the Rules requires cable operators
to limit basic signal leakage in the frequency band from 54
MHz up to and including 216 MHz to 20 µV/m at a distance of
3 meters.16 On June 8, 2003, Mallard exceeded the limits
for both basic signal leakage and cumulative signal leakage
at one location on its system in Pinedale, Wyoming, by
operating with a CLI value of 72.7. In response to an Order
to Cease Operations, Mallard conducted a complete inspection
of its system and reported to the Commission's Denver Office
that over eighteen additional signal leaks existed that
exceeded the basic signal leakage criteria. Mallard does
not dispute the facts of the NAL and acknowledges that it
operated the above-captioned cable system during the time
period described in the NAL. Instead, Mallard seeks
cancellation of the NAL based on its bankrupt status and
inability to pay.
6. In the past, the Commission has given considerable
weight to an entity's bankrupt status in determining whether
rescission of a forfeiture is warranted.17 However, filing
for bankruptcy alone does not preclude the Commission from
imposing a forfeiture upon an entity.18 Of greater
significance is whether the entity has provided financial
documentation to substantiate its inability to pay for the
Bureau's analysis, and whether the entity retains control
over its assets.19 Upon review of the evidence presented,
we find cancellation of the proposed forfeiture is warranted
in light of Mallard's liquidation of assets and termination
of operations. While we cancel the proposed forfeiture, we
admonish Mallard for its willful and repeated violation of
the cable signal leakage standards as set forth in Sections
76.605(a)(12) and 76.611(a)(1) of the Commission's Rules.20
IV. ORDERING CLAUSES
7. Accordingly, IT IS ORDERED that, pursuant to
Section 503(b) of the Communications Act of 1934, as
amended, and Sections 0.111, 0.311 and 1.80(f)(4) of the
Commission's Rules,21 that the proposed forfeiture in the
amount of eight thousand dollars ($8,000) issued to Mallard
Cablevision in the May 25, 2004 Notice of Apparent Liability
for willful and repeated violations of Sections
76.605(a)(12) and 76.611(a)(1) of the Rules IS CANCELLED.
8. IT IS FURTHER ORDERED that Mallard Cablevision IS
ADMONISHED for its willful and repeated violations of
Sections 76.605(a)(12) and 76.611(a)(1) of the Rules.
9. IT IS FURTHER ORDERED that a copy of this Order
shall be sent by First Class and Certified Mail Return
Receipt Requested to Mallard Cablevision, LLC, 3821 Racquet
Club Drive, Suite B, Traverse City, MI 83276 and Eric E.
Breisach, Esquire, Fleischman and Walsh, L.L. P., West Point
Center, 950 North Tenth Street, Suite 200, Kalamazoo, MI
George R. Dillon,
Assistant Chief, Enforcement
147 C.F.R. §§ 76.605(a)(12), 76.611(a)(1).
2The leak was measured on the frequency 121.2625 MHz, at
4321 microvolts per meter ("µV/m").
3A maximum CLI of 64 is the basic signal leakage
performance criteria of Section 76.611(a)(1) of the Rules.
Leakage that exceeds this level is deemed to pose a serious
threat to air safety communications.
4Mallard was ordered to cease operations on the
aeronautical band frequencies or reduce amplitude of all
signals on these frequencies so that the power level did
not exceed 10-4 watts (38.75 dBmV) across a 25 kHz
bandwidth in any 160 microsecond period. Once Mallard
complied with the oral shut down order for all aeronautical
band frequencies on June 8, 2003, the agent identified and
measured seven leaks that exceeded the basic signal leakage
criteria on a non-aeronautical band frequency of 157.2625
5See 47 C.F.R. 76.613(c). Mallard complied with the Order
to Cease Operations.
6These leaks ranged from 30 µV/m to 2900 µV/m.
7According to Mallard, the leaks measured 1670 µV/m and
2900 µV/m respectively. It should be noted that one leak
at 1584 µV/m would cause the cable system to fail CLI.
8Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200432800002 (Enf. Bur., Western Region, Denver Office, May
9Response of Mallard Cablevision, LLC, filed June 24, 2004
10Response at 3.
11Response at 5.
1247 U.S.C. § 503(b).
1347 C.F.R. § 1.80.
1447 U.S.C. § 503(b)(2)(D).
1547 C.F.R. § 76.611(a)(1).
1647 C.F.R. § 76.605(a)(12).
17Interstate Savings, Inc. d/b/a/ ISI telecommunications,
12 FCC Rcd 2934, 2936 (1997).
18Coleman Enterprises, Inc., 15 FCC Rcd 24385, 24389 n. 28
19Adelphia Cable, 18 FCC Rcd 7652, 7654 (2003).
20Because we are canceling the forfeiture based on
Mallard's inability to pay, we do not reach Mallard's
argument alleging that the Commission is time-barred from
pursuing a claim against the estate.
2147 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).