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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
BEAR VALLEY BROADCASTING, INC. ) File No. 99100489
) NAL/Acct. No. 20013208006
Proposed Assignee of Low Power ) Facility #63149
Television Station K06MU, Big ) JWS
Bear Lake, California )
Adopted: December 18, 2000 Released: December 20,
By the Chief, Enforcement Bureau:
1. In this Forfeiture Order, we find that Bear Valley
Broadcasting, Inc. (``Bear Valley'') violated section 310(d) of
the Communications Act of 1934, as amended (the ``Communications
Act'' or the ``Act''), and section 73.3540(a) of the Commission's
rules by willfully and repeatedly assuming de facto control of
the K06MU license without obtaining prior Commission approval.1
Based on our review of the facts and circumstances of this case
and after considering Bear Valley's response to our Notice of
Apparent Liability (``NAL'') in this matter,2 we conclude that
Bear Valley is liable for a forfeiture in the amount of eight
thousand dollars ($8,000).
2. On September 17, 1999, K.I.D.S. - TV63 and Bear Valley
entered into an agreement to sell the K06MU license and station
facilities to Bear Valley. On September 19, 1999, those parties
also entered into an ``Interim Management Agreement.'' The term
of the agreement was through November 30, 1999, but Bear Valley
could ``extend the term for such time as is necessary to obtain
the approval'' for the assignment of the license to Bear Valley.
Under the agreement, Bear Valley acquired ``full and complete
power and exclusive authority to conduct, on behalf of [the
licensee], all business operations and transactions on or
pertaining to'' K06MU. The agreement also provided that Bear
Valley (1) receives all monies derived from station operations,
except for certain insurance benefits, (2) has the right to
establish all policies for the television station, (3) can employ
personnel for the operation of the station, and (4) can make
whatever changes to the station's property or equipment that it
deems appropriate. Bear Valley also assumed any loss that might
result from the station's operation during the management
agreement. K.I.D.S. - TV6 may terminate the management agreement
only if Bear Valley files for bankruptcy or is placed in
receivership, or if Bear Valley defaults on any material
provision of the agreement, and the default is not cured within
60 days or such longer period as is reasonable.
3. Bear Valley acknowledges that under the management
agreement, its principal, Robert Cartwright, controls the
station's financial records and books, pays the station's
operating expenses, and establishes the station's management.
Mr. Cartwright and Bear Valley principal Jacque P. Montero
interview, hire and fire station personnel, establish station
management, and maintain the programming format (which is the
same format used by K.I.D.S. - TV6). Bear Valley pays a contract
engineer to maintain the station's facilities.
4. On December 22, 1999, Chuck Foster, the principal of
K.I.D.S. - TV6, pled guilty in the Superior Court, State of
California, County of San Bernardino, to a criminal charge of
felony insurance fraud. See People v. Chuck Foster, Case No.
FVI009947. Mr. Foster was incarcerated in state prison. On
February 9, 2000, Mr. Foster was sentenced to two years in prison
(with credit for time previously served). Bear Valley states
that prior to Mr. Foster's incarceration, Mr. Cartwright and Mr.
Foster discussed the station's operations on almost a daily
basis. As of June 22, 2000, Mr. Cartwright had not received
permission to visit Mr. Foster in prison, although they had
spoken on the telephone ``on a number of occasions.'' See Bear
Valley June 23, 2000 Response to Letter of Inquiry, Response 3.
5. K.I.D.S. - TV6 and Bear Valley filed an application for
the Commission's consent to assign the K06MU license to Bear
Valley on January 12, 2000 (File No. BALTVL-20000112ABO). That
application remains pending.
6. We concluded in the NAL that Bear Valley had apparently
violated the Act and our rules by willfully assuming de facto
control of the station by virtue of the management agreement and
the actual conduct of the parties, which reflect that Bear Valley
actually set station policies and that Mr. Foster had no role in
the station's operation. We further concluded that Bear Valley's
apparent violation warranted the base forfeiture established by
the Commission for an unauthorized substantial transfer of
7. In its response to the NAL, Bear Valley contends that
its ``violation was minor when viewed in the context in which it
occurred.'' Pointing to Mr. Foster's arrest and subsequent
incarceration, Bear Valley asserts that the station's affairs
were ``thrown into disarray'' and that its ``principals stepped
in to save the station from imminent demise.'' Bear Valley
requests a reduction in the proposed forfeiture.
8. Section 310(d) of the Act provides in pertinent part:
No . . . station license, or any rights thereunder,
shall be transferred, assigned, or disposed of in any
manner, voluntarily or involuntarily, directly or
indirectly, or by transfer of control of any
corporation holding such permit license, to any person
except upon application to the Commission and upon
finding by the Commission that the public interest,
convenience, and necessity will be served thereby.
Similarly, section 73.3540(a) of the Commission's rules, 47
C.F.R. § 73.3540(a), provides, ``Prior consent of the FCC must be
obtained for a voluntary assignment or transfer of control.''
9. We traditionally look beyond the legal title to whether
a new entity or individual has obtained the right to determine
the basic operating policies of the station in ascertaining
whether a transfer of control has occurred. See WHDH, Inc., 17
FCC 2d 856 (1969) aff'd sub nom. Greater Boston Television Corp.
v. FCC, 444 F.2d 841 (D.C. Cir. 1970) cert. denied, 403 U.S. 923
(1971). Specifically, we look to three essential areas of
station operation: programming, personnel and finances. See,
e.g., Stereo Broadcasters, Inc., 87 FCC 2d 87 (1981), recon.
denied, 50 RR 2d 1346 (1982). A licensee may delegate certain
functions on a day-to-day basis to an agent or employee, but such
delegation cannot be wholesale. See, e.g., Southwest Texas
Public Broadcasting Council, 85 FCC 2d 713, 715 (1981). That is,
those persons assigned a task must be guided by policies set by
the permittee or licensee. See David A. Davila, 6 FCC Rcd 2897,
2899 (1991). Moreover, the standards by which we measure control
are equally applicable to situations involving ``time brokerage''
or ``management agreements.'' Choctaw Broadcasting Corporation,
12 FCC Rcd 8534, 8538 (1997).
10. We find, and Bear Valley essentially acknowledges, that
it assumed de facto control of the station through the management
agreement with K.I.D.S. - TV6. The terms of the management
agreement and the actual conduct of the parties show that Bear
Valley set station policies, as opposed to simply managing the
station under Mr. Foster's direction. Under the agreement, Bear
Valley has ``full and complete power and exclusive authority'' to
operate the station. Moreover, Bear Valley assumed all of the
financial risks and the financial benefits from the operation of
the station. All of the station's employees are Bear Valley's
employees, and Bear Valley has the exclusive right to set
personnel policies for the station. Thus, upon implementation of
the agreement, Mr. Foster ceased having any meaningful role in
the station's operation. Thus, well before the filing of the
assignment application - an application that has yet to be
granted - Mr. Foster had ceded control of the station to Bear
Valley. Moreover, it is beyond dispute that, upon his
incarceration, Mr. Foster ceased having any role whatsoever. In
view of the foregoing, we conclude that Bear Valley acquired
ultimate control over station operations without prior Commission
11. Section 503(b) of the Communications Act, 47 U.S.C. §
503(b), and section 1.80(a) of the Commission's rules, 47 C.F.R.
§ 1.80(a), each state that any person who willfully or repeatedly
fails to comply with the provisions of the Communications Act or
the Commission's rules shall be liable for a forfeiture penalty.
For purposes of section 503(b) of the Communications Act, the
term ``willful'' means that the violator knew it was taking the
action in question, irrespective of any intent to violate the
Commission's rules. See Southern California Broadcasting Co., 6
FCC Rcd 4387 (1991). Furthermore, a continuing violation is
``repeated'' if it lasts more than one day. Id., 6 FCC Rcd at
12. The Commission's Forfeiture Policy Statement sets a
base forfeiture amount of $8,000 for an unauthorized substantial
transfer of control. The Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Commission's
Rules, 12 FCC Rcd 17087, 17113 (1997), recon. denied 15 FCC Rcd
303 (1999). That base amount may be adjusted downward if the
violation is deemed ``minor'' in nature. See section 1.80(b)(4)
and accompanying note, 47 C.F.R. § 1.80(b)(4). After considering
all of the circumstances, we believe that the violation is not
minor and that the proposed forfeiture should be imposed. Bear
Valley acquired control well before Mr. Foster's arrest and
incarceration and well before the filing of its assignment
application. Bear Valley's assertion that it acted in order to
``save the station from imminent demise'' does not justify its
actions nor mitigate the significance of its violation. See
Kenneth Paul Harris, Sr., DA 00-2741 at ¶ 6 (Enf. Bureau,
released December 6, 2000).
IV. ORDERING CLAUSES
13. Accordingly, IT IS ORDERED THAT, pursuant to section
503(b) of the Act, 47 U.S.C. § 503 and section 1.80(f)(4) of the
Commission's rules, 47 C.F.R. § 1.80(f)(4), Bear Valley
Broadcasting, Inc. is LIABLE FOR A FORFEITURE in the amount of
eight thousand dollars ($8,000) for willfully and repeatedly
violating section 310(d) of the Act, 47 U.S.C. § 310(d), and
section 73.3540(a) of the Commission's rules, 47 C.F.R. §
14. Payment of the forfeiture shall be made in the manner
provided for in section 1.80 of the Commission's rules, 47 C.F.R.
§ 1.80, within thirty days of the release of this Forfeiture
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, 47 U.S.C. §
504. Bear Valley Broadcasting, Inc. may pay the forfeiture by
mailing a check or money order, payable to the order of the
Federal Communications Commission, to the Forfeiture Collection
Section, Finance Branch, Federal Communications Commission, P.O.
Box 73482, Chicago, Illinois 60673-7482. The payment should note
the NAL/Acct. No. referenced above. A request for payment of the
full amount of this Forfeiture Order under an installment plan
should be sent to: Chief, Credit and Debt Management Center, 445
12th Street, S.W., Washington, D.C. 20554.4
15. IT IS FURTHER ORDERED THAT a copy of this Forfeiture
Order shall be sent by Certified Mail Return Receipt Requested to
Bear Valley Broadcasting, Inc., in care of Howard J. Barr, Esq.,
Pepper & Corazzini, LLP, 1776 K Street, N.W., Suite 200,
Washington, D.C. 20006-2334.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 47 U.S.C. § 310(d); 47 C.F.R. § 73.3540(a).
2 Bear Valley Broadcasting, Inc., Notice of Apparent Liability
for Forfeiture, DA 00-2359 (Enf. Bureau, released October 20,
3 The seller was originally named ``American Sports Kids
Association.'' The agreement was later amended to substitute
K.I.D.S. - TV6 as the seller.
4 See 47 C.F.R. § 1.1914.