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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No. EB-07-SE-379
Side by Side, Inc. ) NAL/Acct. No. 200832100014
Toledo, Ohio ) FRN # 0005850862
Adopted: May 5, 2008 Released: May 7, 2008
By the Chief, Spectrum Enforcement Division, Enforcement Bureau:
1. In this Forfeiture Order ("Order"), we issue a monetary forfeiture in
the amount of five thousand two hundred dollars ($5,200) against Side
by Side, Inc. ("Side by Side"), former licensee of Ku Band earth
station E950401, for willful and repeated violations of Section 301 of
the Communications Act of 1934, as amended ("Act"), and Sections
25.102(a) and 25.121(e) of the Commission's Rules ("Rules"). The noted
violations involve Side by Side's operation of earth station E950401
without Commission authority and its failure to file a timely renewal
application for the station.
2. Section 301 of the Act and Section 25.102(a) of the Rules prohibit the
use or operation of any apparatus for the transmission of energy or
communications or signals by an earth station except under and in
accordance with a Commission granted authorization. Section 25.121(c)
of the Rules provides that the license term for an earth station is
specified in the instrument of authorization. Section 25.121(e) of the
Rules requires the licensee of an earth station to file its renewal
application "no earlier than 90 days, and no later than 30 days,
before the expiration date of the license." Absent a timely filed
renewal application, an earth station license automatically terminates
at the end of the license period.
3. On January 30, 2008, the Enforcement Bureau's Spectrum Enforcement
Division ("Division") released a Notice of Apparent Liability for
Forfeiture ("NAL"), finding that Side by Side continued to operate its
station without Commission authority after the expiration of its
license on August 25, 2005 - a situation that Side by Side did not
seek to remedy until October 17, 2007 when it filed a request for
Special Temporary Authority ("STA") to continue operations pending the
grant of a new license application. The NAL also found that Side by
Side failed to timely file a renewal application for the station by
the date of expiration. Accordingly, the Division proposed a
forfeiture in the amount of $5,200 for the apparent willful and
repeated violations of Section 301 of the Act and Sections 25.102(a)
and 25.121(e) of the Rules.
4. In its February 29, 2008 response to the NAL ("NAL Response"), Side by
Side does not dispute that it engaged in unauthorized operations or
that it failed to file a timely renewal application. Instead, it seeks
a reduction of the proposed forfeiture due to an inability to pay. In
support of this claim, Side by Side asserts that its past gross
revenues do not accurately reflect its current financial status or its
ability to pay, recounting several unforeseen and unavoidable
expenses, including costs associated with an unexpected relocation of
its facilities and the purchase of a new transmitter. Side by Side
also asserts that the introduction of a new national station into the
market has negatively impacted Side by Side's gross revenues and
fundraising abilities. In light of these expenses and limitations on
incoming revenue, Side by Side states that paying the assessed
forfeiture would ultimately threaten its ability to operate, as the
funds to pay the forfeiture would have to come from payroll
allocations, necessitating a reduction in payroll expenses and a
corresponding reduction of employees necessary to continue station
5. To substantiate these claims, Side by Side submits a Statement of
Financial Position reflecting gross revenues and contributions for the
four month period, October 1, 2007 - January 31, 2008; a Statement of
Financial Position reflecting gross revenues and contributions for the
12-month period, October 1, 2006 - September 30, 2007; tax returns
from 2004 and 2005 reflecting gross revenues and contributions from
October 1, 2004 through September 31, 2006; a statement reflecting the
current account status of Side by Side; and an Unpaid Bills Detail as
of February 29, 2008.
6. The forfeiture amount proposed in this case was assessed in accordance
with Section 503(b) of the Act, Section 1.80 of the Rules, and the
Commission's Forfeiture Policy Statement. In assessing forfeitures,
Section 503(b)(2)(E) of the Act requires that we 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. We have considered Side by Side's response to the NAL and its
request for a reduction of the forfeiture amount due to inability to
pay, in light of the above statutory factors, our Rules, and the
Forfeiture Policy Statement. We conclude that Side by Side willfully
and repeatedly violated Section 301 of the Act and Sections 25.102(a)
and 25.121(e) of the Rules and that no mitigating circumstances
warrant cancellation or further reduction of the proposed forfeiture
7. In analyzing financial hardship claims, the Commission generally looks
to a company's gross revenues as a reasonable and appropriate
yardstick to determine their ability to pay assessed forfeitures.
Indeed, the Commission has stated that if a company's gross revenues
are sufficiently large, the fact that net losses are reported, alone,
does not necessarily signify inability to pay.
8. Based on the documentation provided, we find that Side by Side has not
demonstrated that a reduction of the proposed forfeiture is warranted.
Side by Side's financial documents for the most recent three-year
period reflect gross revenues that effectively negate the financial
hardship claim. The proposed forfeiture of $5,200 expressed as a
percentage of Side by Side's gross revenues is significantly less than
the threshold used to determine an inability to pay reduction. While
Side by Side's argument is premised on the Commission's recognition of
an exception to the use of gross revenues - that other financial
indicators, such as significant net losses and inability to continue
operations, may be relevant to a claim of inability to pay - the
limited circumstances under which this exception has been successfully
invoked are not implicated in this case. Side by Side's evidence of
recent unexpected expenses, potential limits on its fundraising
abilities, and potential reliance on payroll allocations to pay the
forfeiture, does not demonstrate that Side by Side cannot pay the
proposed forfeiture or that paying the proposed forfeiture would
significantly impair its financial solvency or service to the public.
Thus, the appropriate measure for determining Side by Side's ability
to pay is gross revenues. In this case, the forfeiture represents a
percentage of Side by Side's gross revenues that falls well within the
percentage range generally considered payable. As the Commission has
recognized, if a violator could escape meaningful sanctions for
violations of the Rules by seeking an inability to pay reduction that
is unsupported by its gross revenues, it would be in a position to
undermine the remedial purposes of Section 503 of the Act.
9. As a result of our review, we conclude that that no reduction is
warranted for an inability to pay. Accordingly, we find that Side by
Side willfully and repeatedly violated Section 301 of the Act and
Sections 25.102(a) and 25.121(e) of the Rules and that a forfeiture in
the amount of $5,200 is appropriate.
IV. ORDERING Clauses
10. 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, Side by
Side, Inc. IS LIABLE FOR A MONETARY FORFEITURE in the amount of five
thousand two hundred dollars ($5,200) for willful and repeated
violation of Section 301 of the Act and Sections 25.102(a) and
25.121(e) of the Rules.
11. 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/Account Number and FRN Number referenced
above. Payment by check or money order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank TREAS/NYC, and account number 27000001. For payment by
credit card, an FCC Form 159 (Remittance Advice) must be submitted.
When completing the FCC Form 159, enter the NAL/Account number in
block number 23A (call sign/other ID), and enter the letters "FORF" in
block number 24A (payment type code). Requests for full payment under
an installment plan should be sent to: Chief Financial Officer --
Financial Operations, 445 12th Street, S.W., Room 1-A625, Washington,
D.C. 20554. Please contact the Financial Operations Group Help Desk at
1-877-480-3201 or Email: ARINQUIRIES@fcc.gov with any questions
regarding payment procedures.
12. IT IS FURTHER ORDERED that a copy of this Order shall be sent by
Certified Mail Return Receipt Requested to Side by Side, Inc.,
Attention: Mr. Todd Hostetler, 5115 Glendale Avenue, Toledo, Ohio
43614-1801, and its counsel, A. Wray Fitch III, Esq., Gammon & Grange,
P.C., Seventh Floor, 8280 Greensboro Drive, McLean, Virginia
FEDERAL COMMUNICATIONS COMMISSION
Kathryn S. Berthot
Chief, Spectrum Enforcement Division
File No. SES-LIC-19950620-00796. Earth station E950401 was licensed to
Side by Side, Inc., d/b/a Yes Ministries.
47 U.S.C. S: 301.
47 C.F.R. S:S: 25.102(a) and 25.121(e).
47 U.S.C. S: 301; 47 C.F.R. S: 25.102(a).
47 C.F.R. S: 25.121(c).
47 C.F.R. S: 25.121(e).
47 C.F.R. S: 25.161.
Side by Side, Inc., Notice of Apparent Liability for Forfeiture, 23 FCC
Rcd 898 (Enf. Bur., Spectrum Enf. Div. 2008) ("NAL").
Id. at 899.
Id. at 900 (proposing an aggregate forfeiture of $6,500 ($1,500 for
failure to timely file a renewal application and $5,000 for unauthorized
operation) reduced to $5,200 for voluntary disclosure and corrective
measures after Side by Side learned of its violations and prior to any
Commission inquiry or initiation of enforcement action).
See Request for Reduction of Proposed Forfeiture Due to Inability to Pay,
February 29, 2008 ("NAL Response").
Id. at 5-6.
Id. at 5.
Id. at 7.
Side by Side requests confidential treatment of the financial statements
and other financial documents provided in its NAL Response. Id. at 2. We
do not rule on Side by Side's confidentiality request at this time.
47 U.S.C. S: 503(b).
47 C.F.R. S: 1.80.
The Commission's Forfeiture Policy Statement and Amendment of Section 1.80
of the Rules to Incorporate the Forfeiture Guidelines, Report and Order,
12 FCC Rcd 17087 (1997), recon. denied, 15 FCC Rcd 303 (1999) ("Forfeiture
47 U.S.C. S: 503(b)(2)(E).
Section 312(f)(1) of the Act defines "willful" as "the conscious and
deliberate commission or omission of [any] act, irrespective of any intent
to violate" the law. 47 U.S.C. S: 312(f)(1). The legislative history of
Section 312(f)(1) of the Act clarifies that this definition of willful
applies to Sections 312 and 503(b) of the Act, H.R. REP. No. 97-765, 51
(Conf. Rep.), and the Commission has so interpreted the terms in the
Section 503(b) context. See Southern California Broadcasting Co.,
Memorandum Opinion and Order, 6 FCC Rcd 4387, 4387-88 (1991), recon.
denied, 7 FCC Rcd 3454 (1992) ("Southern California").
Section 312(f)(1) of the Act defines "repeated" as "the commission or
omission of [any] act more than once or, if such commission or omission is
continuous, for more than one day." 47 U.S.C. S: 312(f)(1). See also
Southern California, 6 FCC Rcd at 4388 (applying this definition of
repeated to Sections 312 and 503(b) of the Act).
See PJB Communications of Virginia, Inc., Memorandum Opinion and Order, 7
FCC Rcd 2088, 2089 (1992) ("PJB Communications"); see also Forfeiture
Policy Statement, 12 FCC Rcd at 17106-07.
See PBJ Communications, 7 FCC Rcd at 2089 (noting that information about
net losses may be relevant in assessing an inability to pay claim, but
where "gross revenues are sufficiently great ... the mere fact that a
business is operating at a loss does not itself mean that it cannot afford
to pay a forfeiture.") See also Local Long Distance, Inc., Forfeiture
Order, 15 FCC Rcd 24385, 24389 (2000), recon. denied, 16 FCC Rcd 10023,
10025 (2001); Independent Communications, Inc., Memorandum Opinion and
Order, 14 FCC Rcd 9605 (1999), recon. denied, 15 FCC Rcd 16060 (2000)
("Independent Communications"); Hoosier Broadcasting Corporation,
Forfeiture Order, 14 FCC Rcd 3356 (Consumer Info. Bur. 1999), recon.
denied, 15 FCC Rcd 8640, 8641 (Enf. Bur. 2002) ("Hoosier Broadcasting").
See, e.g., PJB Communications, 7 FCC Rcd at 2089 (forfeiture not deemed
excessive where it represented approximately 2.02 percent of the
violator's gross revenues); Hoosier Broadcasting, 15 FCC Rcd at 8641
(forfeiture not deemed excessive where it represented approximately 7.6
percent of the violator's gross revenues).
See, e.g., PBJ Communications, 7 FCC Rcd at 2089 (citing Canby Telephone
Association, Memorandum Opinion and Order, 5 FCC Rcd 731 (Com. Car. Bur.
1990) (reducing forfeiture amount from $2,630 to $600 because Canby
demonstrated that its ability to serve the public could be affected by the
amount assessed)); Rebus, Inc., Forfeiture Order, 16 FCC Rcd 2964 (Enf.
Bur. 2001) (reduction of forfeiture from $8,000 to $1,000 warranted due to
inability to pay when station demonstrated significant net losses over the
previous three years and substantial cumulative net losses since the
station's inception, together with significant relocation costs, loss of
lease, and other mitigating circumstances).
See, e.g., Independent Communications, 15 FCC Rcd at 16060; see also Fun
Media Group, Inc., Memorandum Opinion and Order, 20 FCC Rcd 16149 (Enf.
Bur. 2005) (reference to salaries and debt payments are not sufficient to
offset the use of gross revenues as the standard for evaluating an
inability to pay claim.)
See, e.g., Frank Neely, Memorandum Opinion and Order, 22 FCC Rcd 1434,
1435 (Enf. Bur. 2007).
See Petracom of Texarkana, LLC, Forfeiture Order, 19 FCC Rcd 8096,
8097-8098 (Enf. Bur. 2004). See also Journal Broadcasting Corp., Notice of
Apparent Liability for Forfeiture, 20 FCC Rcd 18211, 18214 (Enf. Bur.,
Spectrum Enf. Div. 2005) (forfeiture paid).
47 C.F.R. S:S: 0.111, 0.311, 1.80(f)(4).
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Federal Communications Commission DA 08-1069
Federal Communications Commission DA 08-1069