WPCF 2BET 3|P) X-#XP\  P6Q DXP#Times New Roman (TT)nal)HPLAS4.WRSSx  @,,$`X@2@3P ZZ3|PTimes New Roman (TT)Times New Roman (Bold) (TT)6QXP#HP LaserJet 4/4Mditional)HPLAS4.WRSSC\  P6Q,,$`Pxxf8.8NS8JSJSJ8SS..S.SSSS8A.SSxSSJP!PZ*8888C8SSxJxJxJxJxJooJfJfJfJfJ8.8.8.8.xSxSxSxSxSxSxSxSxSxSxJxSxSxSxSxS]SxSxJxJoJoJfJfJfJxSxSxSxSxSCS8S888SAxSx]AN:*KS8JSSSSS.4}}S2S}288JJS88SS8J82N8\\^C`^SS`*8DSS88S^*8*.SSSSSSSSSS..^^^Jxooxf]xx8Axfxx]xo]fxxxxf8.8NS8JSJSJ8SS..S.SSSS8A.SSxSSJP!PZv8SJSS8]888JJ:S8A8xx*8SSSS!S8.S^8SC\228`K*824S}}}Jxxxxxxoffff8888xxxxxxx^xxxxxx]SJJJJJJoJJJJJ....SSSSSSS\SSSSSSSHP LaserJet 4Si/4Si MX_LPT1oom 344HPLA4SMX.WRSC\  P6Q,,#dP2vvpkmTimes New Roman (TT)Times New Roman (Bold) (TT)Times New Roman (Italic) (TT)Times New Roman (Bold Italic) (TT)a8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  2 k uvta5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  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A. a.(1)(a) i) a)Documentg2ehPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:dYzzzzCCCCqodYYYYYYYYYYY8888dddddddndddddddy.C8*XC\  P6QP7PC2X DXP\  P6QXP.7UC2XxXU4  pQXW!0(X h0\  P6QhPI(!XI,(\  P6Q,PBibliogrphyBibliography:X (# xxxxxx8Co8odooYNCodddYO,OhCddddCoCCCddFdCNC2Cdddd,dCd<d<CCoodCCddCoCddzzzzzzzzzzCCCCozdddddddYYYYY8888dddddddndddddYd"5^2Nodd8CCdr2C28ddddddddddCCrrrdNdzzozzzC8CrdCddYdYCdo88d8odddNN8oYdYNF,Fr2CCCCPCdddddddYYYYYN8N8N8N8oddddoooozYddddzYdzddddYYYYYdddooPdNdNCNdddoNNF2ddNdddddd5d<d<CCYYdCCddCYCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddnddddddd2F@=@G@@Cm#"5@^2Coddȧ8CCdr2C28ddddddddddCCrrrdzNdzoȐC8CtdCdoYoYCdo8Co8odooYNCodddYO,Oh2CC!CCPRCdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNCNodo8RoodȐYYoNoNNF2ldCdddddd yOT"- xԍ WMBX(FM) previously operated under the call letters WHLG(FM). However, we will refer to the station by its current call sign. Jensen Beach, Florida. ARSC subsequently assigned its rights to  xpurchase these stations to PBR. PBR then filed assignment applications in order to acquire the  xkstations, which were granted by the Commission staff. The application for WPBZ(FM) was  x=granted on April 27, 1995 and the applications for WSTU(AM) and WMBX(FM) were granted  xzon January 18, 1996. PBR consummated the acquisition of WPBZ(FM) on July 1, 1995. The acquisitions of WSTU(AM) and WMBX(FM) were consummated on March 15, 1996.  xPBR entered into financing agreements with ARSC in connection with its acquisition of these":& ,**qq%"  xjstations. The financing included two note purchase agreements: the first, for WPBZ(FM), was  xzexecuted on June 30, 1995; the second, for WSTU(AM) and WMBX(FM), was executed on  xMarch 15, 1996. The financing agreements between ARSC and PBR included options which  x0would permit ARSC to acquire both PBR's stock and its stations. In addition, under the  xKagreements, ARSC had the right to a reasonable opportunity to review and approve PBR's annual  xbudgets, as well as the right to review and approve changes in the senior management of the  xstations, which could not be implemented without ARSC's approval. Security, stock pledge and  X_-shareholder agreements were also executed at the same time as the note purchase agreements.  xWhen PBR acquired WPBZ(FM) in July 1995, the station's studios and offices were relocated  xto space in West Palm Beach that was leased from ARSC. The offices and studios for one of  x-ARSC's West Palm Beach stations were also at this location. In addition, ARSC's sales staff sold  x=advertising time for WPBZ(FM) under the terms of a joint sales agreement, which was in place from July 1, 1995 until October 31, 1996.  xWhen PBR acquired WSTU(AM) and WMBX(FM) on March 15, 1996, the stations initially had  xseparate offices and studios in Stuart, Florida. However, in August 1996, ARSC moved its West  xkPalm Beach stations to new studio and office facilities, located at the Northpoint complex in  x[West Palm Beach ("Northpoint"). WPBZ(FM) moved to Northpoint at the same time, to space  xleased from ARSC. In February 1997, WMBX(FM)'s operations were also moved to Northpoint.  xLWSTU(AM) was not relocated to Northpoint; PBR had sold the station to a party unrelated to  X-ARSC in November 1996. yO- xԍ The sale of WSTU(AM) to MMM, Inc. was approved by the Commission staff on October 18, 1996, and consummated on November 4, 1996.  x.ARSC and PBR concede that ARSC's involvement in the operation of PBR's West Palm Beach  x[stations resulted in an unauthorized transfer of control. However, ARSC and PBR state that in  xxbeginning in late August and September 1997, steps were taken to separate the operations of their  xrespective stations at Northpoint and to ensure that PBR is in control of its stations, in accordance with the requirements of the Act and the Commission's rules.  Xe- (DISCUSSION ă  xWe have reviewed the entire record before us, including the joint filings made by PBR and  xARSC. It appears that PBR abdicated control of its West Palm Beach stations and that ARSC  xassumed control of the stations, in violation of the provisions of Section 310(d) of the Act and  X- xSection 73.3540(a) of the Commission's rules, 47 C.F.R.  73.3540(a). In addition, it appears  xMthat based on ARSC's assumption of unauthorized control of PBR's stations, it violated the  x}provisions of the Commission's local radio ownership rules, 47 C.F.R.  73.3555(a).  xNevertheless, we do not believe that these violations put in issue ARSC's basic qualifications to  x>be or remain a Commission licensee. Instead, we have determined that ARSC's misconduct  X#- xjustifies a forfeiture of $18,500 for the apparent violations of Section 310(d) of the Act and of"# ,))qqe""  X-47 C.F.R.  73.3540(a) and the apparent violations of 47 C.F.R.  73.3555(a).& yOy- xԍ We are also issuing a separate Notice of Apparent Liability for Forfeitures to PBR for apparent violations of  xSection 310(d) of the Act and of 47 C.F.R.  73.3540(a), as well as for apparent violations of 47 C.F.R.   x73.3613(b), which required the filing, within 30 days, of the financing agreements between ARSC and PBR. However, we also find that these violations do not put in issue PBR's basic qualifications.  yO-  &  X-   X< Unauthorized Transfer of De Facto Control Section 310(d) of the Act, states, in pertinent part: xNo construction permit or station license, or any rights thereunder, xshall be transferred, assigned, or disposed of in any manner, xvoluntarily or involuntarily, directly or indirectly, or by transfer of xcontrol of any corporation holding such permit or license, to any xperson except upon application to the Commission and upon xfinding by the Commission that the public interest, convenience, xand necessity will be served thereby.  X - x/47 U.S.C.  310(d); see also 47 C.F.R.  73.3540(a)(implementing the statutory provisions of  xSection 310(d) and prohibiting the voluntary assignment or transfer of control of a broadcast permit or license without prior Commission consent).  Xe- xAlthough there is no formula for evaluating whether a party is in de facto, or actual, control, see,  XP- xe.g., Stereo Broadcasters, Inc., 55 FCC 2d 819, 821 (1975), modified, 59 FCC 2d 1002 (1976),  xwe look to whether a new entity has obtained the right to determine the basic operating policies  xof the station, that is, to affect decisions concerning the personnel, programming or finances of  X - xthe station. See WHDH, Inc., 17 FCC 2d 856 (1969), aff'd sub nom. Greater Boston Television  X- xCorp. v. FCC, 444 F.2d 841 (D.C. Cir. 1970), cert. denied, 403 U.S. 923 (1971). A licensee may  X- xdelegate certain functions on a daytoday basis to an agent or employee, e.g., Southwest Texas  X- xlPublic Broadcasting Council, 85 FCC 2d 713, 715 (1981), but such delegation cannot be  xKwholesale. That is, those parties delegated a task must be guided by policies set by the permittee  X-or licensee. See David A. Davila, 6 FCC Rcd 2897, 2899 (1991).  xHere, the record indicates that terms of the financing agreements themselves exceeded generally  xacceptable boundaries for loan agreements. In this regard, ARSC had the right to review and  XH- xapprove PBR's finances.Hx yOq#-ԍ These provisions were deleted from the financing agreements in a December 10, 1997 amendment. In practice, it appears that ARSC was the handson decision maker for PBR with respect to most aspects of the financial operations of PBR's West Palm Beach stations.  xMoreover, the financing agreements gave ARSC the right to review and approve changes in  xPBR's senior management. ARSC was actively involved in many aspects of the process through  xxwhich PBR hired personnel for its stations, including recommending, interviewing and negotiating" ,))qq"  xthe employment of candidates for key positions, including senior management. ARSC's counsel  x[also at times prepared employment contracts for PBR employees, apparently at the direction of ARSC. ARSC participated in the termination of at least one of PBR's employees.  X-    x{ARSC was also involved in the programming and promotion of PBR's stations, including  x.participating in and making recommendations with respect to format. In this regard, it appears  xKthat an ARSC employee continued to be responsible for directing WPBZ(FM)'s promotions when  xthe joint sales agreement terminated on October 31, 1996. ARSC also recommended  xprogramming consultants, who provided audience research, music testing and program evaluation  X1-that was shared by ARSC and PBR.  X - xL Although PBR ratified some of the recommendations made by ARSC, especially with regard to  xpersonnel, the record, viewed as a whole, indicates a pervasive involvement by ARSC in the  x=operation of PBR's West Palm Beach stations. Under these circumstances, it appears that PBR  X - xabdicated and ARSC assumed de facto control of PBR's stations from July 1995 at least until  X - x[September 1997, in violation of the Act and the Commission's rules. See Roy M. Speer, 11 FCC Rcd 18393, 18415 (1996).  Xf- Resulting Violations of the Multiple Ownership Rules  xAs ARSC acknowledges, in 1995, it assigned its right to purchase WPBZ(FM) to PBR in part  xbecause it already controlled two FM stations in the relevant radio market. Under the numerical  xlimits specified in the Commission's local radio ownership rules then in effect, a single entity  xcould permissibly own up to two AM and two FM stations in the radio market at issue, which  X- xhad more than 15 commercial radio stations. See 47 C.F.R.  73.3555(a)(1992). However, by  xjthe time that the transactions for WSTU(AM) and WMBX(FM) were consummated, March 15,  x1996, revised local radio ownership rules, mandated under the Telecommunications Act of 1996,  X- xwere in place. 61 Fed. Reg. 10689 (1996). See Implementation of Section 202(a) and 202(b)(1)  X- x>of the Telecommunications Act of 1996, 11 FCC Rcd 12368 (1996). Under the revised rules,  xownership of up to eight stations, no more than five of which are in the same service is  xpermissible in the relevant local market, which has at least 45 commercial stations. Therefore,  xARSC's assumption of control of WPBZ(FM) from July 1, 1995 until the effective date of the new rules on March 15, 1996, without waiver, violated the provisions of Section 73.3555.  x.However, by March 1997, ARSC, through subsidiaries, had acquired additional stations in the  xKrelevant local radio market. These acquisitions brought ARS's ownership to a total of six stations  xԩtwo AM and four FM stations. Thus, ARSC's ongoing control of PBR's two remaining FM  xkstations WSTU(AM) had been sold in November 1996 violated the applicable numerical  xlimits of five sameservice radio stations. ARSC's multiple ownership rule violation ended when  xsteps were taken to place PBR in control of its West Palm Beach radio stations, sometime around  xSeptember 1997. Therefore, ARSC's unauthorized control of PBR's West Palm Beach stations  x=resulted in violations of the Commission's local radio ownership rules from July 1995 to March 1996 and from March 1997 at least until September 1997. "(,))qq&"Ԍ X- ^)FORFEITURE ă  xAccordingly, pursuant to Section 503(b) of the Communications Act, you are hereby advised of  X- x\your apparent liability for a FORFEITURE in the amount of $ 18,500 for your apparent willful  xand repeated violation of Section 310(d) of the Act, Section 73.3540(a) of the Commission's rules  X- x.and Section 73.3555(a) of the Commission's rules. We have considered the factors set forth in  xz47 U.S.C.  503(b) as well as Commission precedent concerning similar violations in order to  X_- xjdetermine the appropriate amount of the fine imposed._ {O- xԍ In United States Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 1994), the United States Court of Appeals  {O - xifor the District of Columbia Circuit vacated the Policy Statement, Standard for Assessing Forfeitures, 6 FCC Rcd  {Ol - xK4695 (1991), recon. denied,  7 FCC Rcd 5330 (1992), revised, 8 FCC Rcd 6215 (1993). In accordance with the  {O6 - xcourt's decision, and after notice and public comment, the Commission adopted Forfeiture Guidelines, 12 FCC Fcd  x17087 which became effective October 14, 1997. The apparent violations of Section 310(d) of the Act and of  xSection 73.3540(a) of the Commission's here were continuing in nature, but commenced prior to the effective date  xof the new guidelines. In addition, we are here imposing a forfeiture for apparent violations of Section 73.3555(a)  {OX- xYof the Commission's rules that occurred before the effective date of Forfeiture Guidelines. With respect to apparent  x,violations occurring before the effective date of the new guidelines, the Commission has determined to consider the  xcriteria developed under Section 503 and applied by the Commission in previous cases, and we have done so here. 12 FCC Rcd at 1710809.  Furthermore, you are afforded a period  xof thirty (30) days from the date of this letter to show, in writing, why a forfeiture penalty should  xnot be imposed or should be reduced or to pay the forfeiture. Any showing as to why the  xforfeiture should not be imposed or should be reduced shall include a detailed factual statement  xand such documentation and affidavits as may be pertinent. 47 C.F.R.  1.80(f)(3). Other  xjrelevant provisions of Section 1.80 of the Commission's rules are summarized in the attachment to this letter. x` `  hh@Sincerely, x` `  hh@Roy J. Stewart x` `  hh@Chief, Mass Media Bureau Attachment  X-cc: xJohn R. Feore, Jr., Esq. xM. Anne Swanson, Esq. xCounsel to American Radio Systems Corporation. xDow, Lohnes & Albertson, P.L.L.C. x1200 New Hampshire Ave, N.W. xSuite 800  X7-xWashington, DC 20036