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JJuly 29, 1998  X& -` `  hh,Vpp Released: July 30, 1998  X -`(#(# ă  X - 3'3'Standard3' 3'Current Windows FormSC\ ݌X 3' 3'Current Windows FormSC\ 3' 3'Current Windows FormSC\ ݌X  X  3' 3'Current Windows FormSC\ 3' 3'Current Windows FormSC\ ݌  W  WW   X` hp x (#%'0*,.8135@8:M#X[2PQP##XP\  P6Q DXP#Dear Applicants and Mr. Davis:  X$- +>M+!#XP\  P6Q DXP#This is in reference to the applications for assignment of the licenses of stations  X|%-  KSLD(AM)/KKIS-FM,|%O yO'-  -ԍ Shortly after these application were filed, the call sign for the FM station was changed from KAZO(FM) to KKIS-FM. For convenience, we will refer to the station at all times by its present call sign of KKIS-FM. Soldotna, Alaska, from King Broadcasters, Inc. ("King"),n|% O yO-ԍ Sally Hoskins ("Hoskins") is King's President and 100% shareholder.n to Chester P."|%X,**qqr$"  X-    +!+!  3' 3'Current Windows FormSC\ 3' 3'Current Windows FormSC\ ݌W 3' 3'Current Windows FormSC\ 3' 3'Current Windows FormSC\ ݌W  W  3' 3'Current Windows FormSC\ 3' 3'Current Windows FormSC\ ݌  W  WW +! + ++/! Coleman ("Coleman") (File Nos. BAL-940401EA/BALH-940401EB),&X+] yO -  ԍ Although construction of new FM station KKISFM was completed shortly before the subject assignment   application was filed, the application was assigned a file number prefix reflecting the stations unlicensed status   ("BAPH"). The license for KKISFM was subsequently issued on July 28, 1995 (File No BLH940329KA) and   Ktherefore we have changed the file number prefix to "BALH" to reflect the fact that KKISFM is now a licensed facility.& the Petition to Deny filed   >May 13, 1994, by Peninsula Communications, Inc. ("Peninsula"), the licensee of KPENFM,   zSoldotna, Alaska, and the informal objection filed November 6, 1995, by William J. Glynn, Jr.  X-  j("Glynn").m+] yOt -  ԍ Also before the Commission are the following pleadings: (1) the Opposition to Petition to Deny filed June 20.   1994, by Coleman; (2) the Reply filed June 30, 1994, by Peninsula; (3) the Response to Reply filed July 29, 1994,   by Peninsula; (4) the Comments of Peninsula filed November 3, 1995; (5) the Supplement to Comments of Peninsula   filed January 11, 1996; (6) the Supplemental Response to Comments of Peninsula Communications, Inc., filed by   King on February 20, 1996; (7) the Comments and the Statement for the Record of Peninsula Communications, Inc.,   filed July 1, 1996; (8) Coleman's Reply to Comments and Statement for the Record of Peninsula Communications,   Inc., filed July 10, 1996; (9) a letter from counsel for KSRM, Inc., in response to Peninsula's Comments filed July   12, 1996; and (10) a letter from KSRM, Inc., dated July 30, 1996, providing additional information in response to an April 8, 1996, staff letter of inquiry.m For the reasons set forth below, we deny Peninsula's Petition to Deny and Glynn's   !informal objection, and we grant the applications for assignment of the KSLD(AM) and KKIS-FM licenses from King to Coleman.   +/!+9!However, as set forth herein, it does appear that King engaged in an unauthorized transfer  XH-  of control of stations KSLD(AM) and KKIS-FM to Coleman and to KSRM, Inc. ("KSRMI"),qH  yO-ԍ KSRMI is the licensee of KSRM(AM), Soldotna, AK, and KWHQFM, Kenai, AK.q   without prior Commission consent, in violation of Section 310 of the Communications Act of   1934, as amended (the "Communications Act"), and Section 73.3540 of the Commission's Rules.   We have determined that the appropriate sanction for this violation is a monetary forfeiture, not   denial of the assignment application. This letter, therefore, also constitutes a NOTICE OF   APPARENT LIABILITY FOR FORFEITURES against King Broadcasters, Inc., and against   jKSRM, Inc., pursuant to Section 503(b) of the Communications Act, under authority delegated to the Chief of the Mass Media Bureau by Section 0.283 of the Commission's Rules.   Xy- N+9!+The Pleadings. Peninsula alleged in its Petition to Deny that King transferred++ ! control of   stations KSLD(AM) and KKIS-FM to Coleman prior to the time that the applications for consent   to that transfer were filed with, and granted by, the Commission, in violation of Section 310(d)   of the Communications Act. Peninsula pointed first to a "Program Services Agreement" ("PSA")   dated February 16, 1994. The PSA is a time brokerage agreement pursuant to which Coleman   [provides programming for "substantially all the Stations' [KSLD(AM) and KKIS-FM] air time,"   including entertainment, commercials, news, and public service announcements. Coleman pays   King $2,600 per month for the right to program the stations, but those payments are to be   credited+ !+*! against the purchase price for the stations. The PSA further provides that Coleman will   /"reimburse" King for all operating expenses of the stations, specifically including electrical   power, liability insurance, and the salary for one full-time employee of King. The PSA also   provides that Coleman will "acquire and install and during the term of this Agreement maintain,   at [Coleman's] sole expense, all technical equipment necessary for the construction of the"eh%/++"   facilities of Station [KKIS-FM] in accordance with that station's construction permit . . . ." At   [the time the PSA was signed, KKISFM had not yet been constructed. Coleman subsequently   constructed station KKISFM and placed it into operation. An FCC Form 302 license application   zto cover the KKISFM permit was filed on March 29, 1994 (File No. BLH940329KA, granted July 28, 1995).   +*!+*!Peninsula further alleged that one of its officers, David Becker, visited the   KSLD(AM)/KKISFM studios on May 10, 1994, asked to speak to the general manager of the   stations, and was told by the KSLD(AM)/KKISFM receptionist that the General Manager of the   stations was Chester Coleman, who was "out of state" at that time. According to Peninsula, this   incident established that Coleman had also assumed the duties of General Manager of   =KSLD(AM)/KKISFM. Peninsula also supplied a Declaration from a former employee of King,   LRon Holloway, who stated that he and another King employee, Dan Donovan, were called to a   meeting at the station offices with Chester Coleman. At that meeting, Coleman handed both   Holloway and Donovan "letters in which it was stated that Mrs. Hoskins had terminated our   positions effective immediately and that we could pick up our paychecks on Friday. No further   conversation end of meeting." According to Peninsula, this incident demonstrated that Coleman   had the ultimate authority to fire employees, which is a responsibility incident to a general manager's duties.   ]+*!+%!Peninsula also alleged that the change of call sign for the newly constructed FM station   from KAZO(FM) to KKISFM was a further indication of Coleman's improper control over   KKISFM. According to Peninsula, the KKIS call sign was at the time assigned to an AM   [station in Concord, California, licensed to Concord Area Broadcasters, which is controlled and   50% owned by Chester Coleman. Coleman supplied King with a letter for submission with   King's call sign change request authorizing King to request the use of the call sign KKISFM,  X-concurrently reserving KKIS(AM) for continued use by the Concord station. yO#-  [ԍ The two stations shared the KKIS call sign (as "(AM)" and "-FM") until the call sign for KKIS(AM) was changed to KRHT(AM) on January 29, 1996.    +%!+*!Peninsula further alleged that upon prematurely assuming control of the stations, Coleman   then engaged in a further transfer of control of the stations to John Davis, the owner of KSRMI,   licensee of stations KSRM(AM), Soldotna, and KWHQ-FM, Kenai, Alaska. To support this   >allegation, Peninsula stated that when its officer, Mr. Becker, had asked to see the stations'   general manager (as discussed above) and was told that Mr. Coleman was not in the area, the   \KSLD(AM)/KKISFM receptionist then directed Becker to John Davis, whom she allegedly   identified as the "General Manager in Mr. Coleman's absence." Peninsula also stated that   Coleman constructed the new KKISFM studios in the same office space as that housing the   MKSRM/KWHQ studios, and moved the KSLD(AM) studios there as well. Further, Becker's   Declaration states that Davis told him that his company, KSRMI, had an "exclusive marketing   agreement with Chester Coleman" that permitted KSRMI to jointly sell advertising for   ?KSLD(AM)/KKISFM in conjunction with its sales efforts for KSRM(AM)/KWHQFM.   Peninsula submitted sales promotional materials used for the joint sales of advertising by the KSRMI sales staff for the four stations.   +*!+!Peninsula alleged that KSRMI's control over KSLD(AM), KKISFM, KSRM(AM), and"#' %/++%"   KWHQFM involves four of the six stations in the market, in violation of the multiple ownership  X-  <rules governing markets with 14 or fewer stations.S( K yOb-  ԍ Prior to March 1996, when the rule was modified as a result of the Telecommunications Act of 1996, Section   73.3555(a)(1) of the Rules, 47 C.F.R. 73.3555(a)(1), provided that, "[i]n radio markets with 14 or fewer commercial   ;radio stations, a party may own up to 3 commercial radio stations, no more than 2 of which are in the same service   (AM or FM), provided that the owned stations, if other than a single AM and FM combination, represent less than   ;50 percent of the stations in the market." In addition, Section 73.3555(a)(2) provided that where a person with an   attributable interest in one station in a market engages in the time brokerage of more than 15 percent of the broadcast   time per week of another station in the market, "that party shall be treated as if it has an interest in the brokered   station subject to the limitations set forth in paragraphs (a) and (e) of this section." As a result of the   YTelecommunications Act of 1996, Section 73.3555(a)(1) was modified by Commission action of March 7, 1996, to   allow a single owner to have an attributable interest in up to five commercial radio stations in a market with 14 or   fewer stations, provided no more than three are in the same service and the stations do not represent more than 50%  yO -  of the total stations in the market.#X\  P6G; qP# # C\  P6QP#See Implementation of Section 202(a) and 202(b)(1) of the Telecommunications  yO -Act of 1996 (Broadcast Radio Ownership), 11 FCC Rcd 12368 (1996).#G\  P6Q'P#S Peninsula claimed that because KSRMI could   Knot own KSLD(AM)/KKISFM outright, KSRMI's owner, John Davis, "has apparently concocted   [a scheme wherein Coleman, a radio station broker, has contracted to purchase KSLD(AM) and   KKISFM from Mrs. Hoskins, has entered into a time brokerage agreement with her over the   stations while FCC approval is pending, and has turned control of the stations over to Davis to   operate on his behalf." According to Peninsula, Hoskins is a willing participant in Davis's   scheme because Hoskins is desperate to sell the stations, as is evidenced by similar allegations   of a premature transfer control of KSLD(AM) in connection with a previous 1992 proposed sale  X1-to Cobb Communications, Inc.1 K yO-  ԍ Cobb had previously been proposed as an assignee of the stations by applications filed February 24, 1992 (File   ZNos. BAL-920224EH/BAPH-920224EI). The Mass Media Bureau sought additional information from King and   Cobb regarding an alleged premature transfer of control of KSLD(AM) to Cobb. The parties submitted   comprehensive responses to the letters of inquiry, but requested voluntary dismissal of the assignment of KSLD(AM)   and KKISFM to Cobb. On July 9, 1993, the staff granted the request and dismissed the applications but did so   ["without prejudice to whatever further action, if any, the Commission deem[ed] appropriate [with respect to  yOJ-  jallegations of premature transfer of control.]" See Letter to Michael H. Bader, Esq. and Howard J. Barr, Esq.   Reference 8910MAG (Chief, Audio Services Division, July 9, 1993). We find here that Hoskins and King did not   <abandon control of KSLD and KKIS to Cobb in the period during which the assignment to Cobb was pending and the time brokerage agreement between Cobb and King was in place.    +!+!In his Opposition to the Petition to Deny, Coleman asserted that the PSA is a permissible   time brokerage agreement which provides for the sale of a substantial block of time on the   Mstations to Coleman in consideration for Coleman making a monthly payment to King "plus   Zreimbursing [King] for its operating expenses and acquiring and installing the equipment that was   needed to complete construction of KKIS-FM." According to Coleman, the PSA comports with   time brokerage agreements that have been found by the Commission not to have resulted in a  Xy-  ktransfer of control of a radio station, citing Revision of Radio Rules and Policies, 7 FCC Rcd  Xb-  6387,  66 (1992); Joseph A. Belisle, 5 FCC Rcd 7585 (MMB 1990); J. Dominic Monahan, 6  XK-  kFCC Rcd 1867 (MMB 1990); and Peter D. O'Connell, 6 FCC Rcd 1869 (MMB 1990). Coleman   further asserted that the PSA commits King to retain "ultimate control over the Stations' facilities   Nand operations, including, specifically control over the stations finances, personnel and   programming and compliance with the Stations' obligations to operate in the public interest and   to comply with the rules, regulations and policies of the FCC." The PSA also allows King to   -reserve up to eight hours per week "for the broadcast of regularly scheduled news, public affairs,"P%/++T"   and other programming produced and/or selected by Owner." The PSA further provides that   King is obligated to broadcast programming over the stations which addresses the issues of public   importance in the service areas, and that King "will use a substantial portion of the air time reserved to it under the Agreement to satisfy its public service programming obligations."   +!+/!With respect to the change in call sign for KKISFM station, Coleman admitted asking   MKing to change it and making the call sign of his California station available to King, but he   contended that there was no legal significance to this involvement. Coleman argued that call   Msigns are promotional and marketing identifiers for radio stations, and that a time brokerage   agreement typically gives the programmer the right to request changes in call signs for marketing   purposes. With respect to Peninsula's allegation that Coleman was involved in the firing of King   employees Ron Holloway and Dan Donovan, Coleman submitted new declarations from both   Holloway and Donovan, as well as from Coleman and Sally Hoskins, all asserting that Ms.   Hoskins was in fact present at the meeting at which Holloway and Donovan were fired, and that   -Hoskins herself handed them their termination letters (which were letters signed by Hoskins), not   >Coleman. Coleman also submitted a declaration from the stations' receptionist, who denied having identified either Coleman or John Davis as the general manager of KSLD(AM)/KKISFM.   +/!+>!As for the further allegation that Coleman, subsequent to assuming control from King,   then turned over control of the stations to John Davis' KSRMI, Coleman admitted to having   entered into an oral joint advertising sales agreement with KSRMI, enabling it to engage in joint   sales of KSLD(AM)/KKISFM with KSRMI's KSRM(AM)/KWHQFM. Coleman insisted,   however, that Davis and KSRMI have had no involvement in programming KSLD(AM) or KKIS  FM, or in any other aspect of KSLD(AM)/KKISFM's operations other than advertising sales  X-  pursuant to the joint sales agreement with Coleman. Citing Revision of Radio Rules, supra, 7   FCC Rcd 2755,  63, Coleman argued that joint venture arrangements that do not involve time brokerage or programming are permitted by the Commission without restriction.   +>!+ !In its Reply, Peninsula contended that King had tried to mislead the Commission that the   KSLD(AM)/KKISFM "main" studios are located at Mrs. Hoskins's other non-broadcast business,   #Sam's Pawn Shop, when in fact the stations are operated completely from Davis's   iKSRM(AM)/KWHQFM studios several miles away, which Hoskins had advised the Commission   /in a March 2, 1994, letter were "auxiliary" studios for KSLD(AM)/KKISFM. Peninsula also   alleged that KSLD(AM)'s only microwave studio-transmitter link was moved to the KSRM(AM)   studios, and that therefore "Mrs. Hoskins has no ability to operate KSLD(AM) and KKISFM   stations from Sam's Pawn Shop." In addition, Peninsula submitted a Declaration of Brent   Elkington, the licensee of KZXX(AM), in neighboring Kenai, Alaska, in which Elkington stated   that, "[i]t is generally known here in the KenaiSoldotna radio market that Mr. John Davis   controls and jointly sells KSRM(AM), KWHQFM, KSLD(AM) and KKIS-FM and that Mrs.   MSally Blakely Hoskins has essentially abandoned her day-to-day control over the latter two   stations to Mr. Davis." Elkington described a joint sales presentation he witnessed wherein Davis   "made it clear that he would in the future be jointly selling advertising for   kKSRM-KWHQ-KSLD-KAZO (now KKIS)." Elkington also asserted that by listening to the   /station, he had "ascertained that Mr. Davis' employees produce and participate in the local   yprogramming broadcast over KSLD(AM) and KKISFM." Elkington stated in particular that all   of the locally-produced public service and commercial announcements on KSLD(AM)/KKISFM   feature Davis' employees, and that KSLD(AM)'s daily 7:00 pm to 11:00 pm live local programming, a talk show, was moderated by Pat Nichols, an employee of KSRMI."*%/++O)"Ԍ X- + !+4!#X2\  P6Q(.P##XP\  P6Q DXP#љColeman's Response to Reply included a Declaration from Sally Hoskins attesting that the   main studio for KSLD(AM)/KKISFM, located at Sam's Pawn Shop, has full program origination   equipment and means for both stations to broadcast directly from this location. Additionally,   <Coleman provided his own Declaration and one from Davis stating that the persons who produce   and announce public service announcements and commercials for KSLD(AM)/KKISFM are   employees of Coleman's production company, "Radio One." According to both Coleman and   Davis, the only material produced or announced by persons employed by KSRMI are   commercials which are sold in combination with KSRM(AM)/KWHQFM pursuant to the   admitted joint sales agreement between Coleman and Davis. With respect to the employee of   KSRMI who also hosted a daily program on KKISFM, Pat Nichols, Davis and Coleman claimed   that Ms. Nichols at that time was concurrently employed by KSRMI and by Coleman's Radio   One, and Coleman produced a copy of Radio One's payroll check for Nichols for the relevant   time period. Further, Coleman attested that he had been much more involved in the   programming produced for KSLD(AM)/KKISFM pursuant to the PSA than claimed by   Peninsula, and he pointed to certain programming decisions he made and to frequent trips to   Soldotna to supervise programming operations. Coleman further stated that he has a full-time employee on site who supervises Radio One's daily programming operations.   +4!+ !Peninsula's January 11, 1996, Supplement to Comments alleged that Sally Hoskins, the   sole owner of King, had filed a voluntary petition for personal bankruptcy in U.S. Bankruptcy   Court in Alaska on August 31, 1995, and had failed to list her ownership of King and the stations   as assets. According to Peninsula, this alleged failure shows that Hoskins does not consider   herself to be the owner or licensee of the stations. King's February 20, 1996, Supplemental   Response to Comments contradicts this allegation, noting that Hoskins' ownership of King's stock   jwas correctly listed in her bankruptcy filing, and that Peninsula looked on the wrong schedule.   King contends that Hoskins's personal bankruptcy has no impact on the subject assignment applications.   + !+!The Commission also received an informal objection dated November 6, 1995, from   jWilliam J. Glynn, Jr., of Kasilof, Alaska. Glynn alleged that announcements were recently aired   on stations KKISFM, KSRM(AM), and KWHQFM, encouraging listeners to apply for a   construction permit for a new FM allocation at Kasilof. According to Glynn, these   announcements were aired by Davis in "an attempt to generate so many filings on the Kasilof   allocation that the matter will be designated for hearing and tie up the proceeding for years."   Glynn claims that this effort will limit competition by keeping a new station in an adjoining market off the air pending the outcome of the hearings.   X!-   +!+ !Commission Inquiries and Inspections. After review of the Peninsula and Coleman   [pleadings, the Audio Services Division staff sought additional information as to whether there   had been a premature or unauthorized transfer of control of Stations KSLD(AM) and KKISFM   zfrom King to Coleman and/or to Davis and KSRMI. The Division thus on May 8, 1995, sent   Lletters of inquiry to King and Coleman. Responses to the Commission's letters of inquiry were   filed by King on July 6, 1995, and by Coleman on July 13, 1995. In addition, inspections of   both the main and auxiliary studios of KSLD(AM)/KKISFM were conducted by the Anchorage   Field Office of the Commission's Compliance and Information Bureau ("CIB") on August 23, 1995.   ^+ !+4!The responses to the Commission's May 1995 letters of inquiry provided information"*%/++O)"   /regarding Coleman's and KSRMI's involvement in the operations of the stations starting in   February of 1994. First, the responses to the letters of inquiry disclosed that Coleman had   !assigned his rights and obligations under the King/Coleman PSA to KSRMI, by a letter   agreement dated April 27, 1995, effective May 1, 1995. Thus since that date, KSRMI has been   directly acting as programming broker for the stations. It was also noted that KSLD(AM) had   Ngone silent under Commission authority in February 1995 and therefore KSRMI was not  Xv-  yproviding any programming to KSLD(AM), only to KKISFM.K vk yO-  ԍ On July 12, 1995, pursuant to Section 73.3613(d) of the Rules, KSRMI filed with the Commission a copy of   the PSA and the letter agreement whereby Coleman assigned his rights and obligations under the PSA. KSRMI's   filing stated that although the PSA covers programming for both stations, KSLD(AM) was off the air, and "the   Jparties have no present intention of resuming operation." However, Commission records indicate that KSLD(AM) returned to the air on November 6, 1996.K Coleman disclosed that he and   KSRMI had entered into a reciprocal option agreement providing options to acquire each other's   stations under certain conditions. In addition, the April 27, 1995, letter agreement provided that   if KSRMI were to sell KSRM(AM) and KWHQFM to a third party as a combination, KSRMI   kwould also have the right to compel Coleman to sell KKISFM to that same party in a single  X -  transaction, as long as the purchase price for KKISFM was at least $500,000 (i.e., if the price   is equal to or exceeds $500,000, Coleman did not have the right to approve or disapprove the   sale or the final sales price for KKISFM). In addition, if KKISFM is sold pursuant to the   [provision, the proceeds would be split by Coleman and KSRMI. Specifically, the first $100,000   [would go to Coleman (plus an amount not to exceed $15,000 to pay for the equipment Coleman  X-  leased from KOLA, Inc.), xk yO-  ԍ Coleman attached to his July 13, 1995, response to the letter of inquiry, an agreement with the Receiver for   KOLA, Inc., agreeing to sell Coleman the equipment previously leased from KOLA, Inc., for $6,000. Coleman   purchased that equipment from the KOLA Receiver on April 4, 1995, by executing a two-year promissory note in that amount for the benefit of the Receiver. and the remainder of the sale proceeds from KKISFM would be split  Xy-  equally by Coleman and KSRMI.Y Xy` k yO-  ԍ Thus assuming a sale price for KKISFM of $500,000, Coleman would receive approximately $307,500 and   KSRMI would receive approximately $192,500. Under this formula, the higher the sale price over $500,000, the higher the percentage of the proceeds would be paid to KSRMI.Y In addition, the letter agreement provided KSRMI itself an   option to purchase KKISFM for $100,000 plus the $15,000 cost of the equipment leased from   KOLA, Inc. Coleman was also granted an option to purchase KSRM(AM)/KWHQFM from   KSRMI for $1,400,000. The letter agreement also stated that as a condition to Coleman   exercising this option, he "must repay, in cash, all sums that I have borrowed personally from John G. Davis, President of KSRM, Inc." +4!+/!  lWith respect to Coleman's involvement in the construction of KKISFM, Hoskins stated   that she had retained an engineering consultant and had contracted to purchase equipment for the   new FM facilities prior to entering into the PSA with Coleman. Hoskins produced a copy of her   Zengineering construction contract, an equipment order, and an $8,000 deposit check. Hoskins did   not claim that this deposit paid for any equipment or that she did in fact pay any of the costs of   constructing KKISFM. Hoskins did state, however, that KKISFM's transmitting equipment is   installed on a tower she owns and inside her transmitter building. Coleman stated that he   /"supplied" KKISFM's used transmitter, stereo generator and exciter, audio processor, and   miscellaneous cables, mounting items, and spare parts through a lease from a third party (KOLA,   Inc.). The terms of the equipment lease were not specified, but Coleman claimed he made all"  %/++["   Mthe lease+/!+%! payments, made all the relevant arrangements, and was solely responsible for this   obligation. In addition, Coleman claimed he purchased the FM station's 3-bay antenna, STL   package, computer systems, meters, amplifiers, and most other studio and transmission equipment   from Broadcast Supply Worldwide, Inc. ("BSW"). The total price of the purchased items was   {$62,734.30, and Coleman's July 13, 1995, response to the letter of inquiry asserted that he   K"ordered and paid for the equipment listed" as having been purchased from BSW. King does not pay Coleman anything for the use of this equipment by KKISFM.   ?+%!+/!As noted above, the PSA specified that Coleman would reimburse King for all expenses   yincurred in the operations of the stations. Although King continued to pay the cost of liability   Linsurance for the stations (under a blanket policy covering Hoskins' other businesses as well),   =Coleman in fact paid all other costs of the stations' operations, including utilities, auxiliary and   main studio rents, telephone service, and satellite program services. Coleman stated that he   entered into an agreement directly with Satellite Music Network for the satellite programming   format broadcast by KKISFM (the "Hot-AC" network), and that during the term of the PSA,   [Coleman also paid Satellite Music Network for the "Pure Gold" program network that had been carried on KSLD(AM) under an agreement that predated the PSA. +/!+  ++!In addition, Coleman explained in his July 13, 1995, response to the Commission's letter   of inquiry that during the time that he operated the stations pursuant to the PSA, he paid all the   .stations' expenses directly rather than reimbursing King for these expenses as called for in the PSA:   ^+!+Although the Programming Agreement, as originally drafted, contemplated that Sally  0[Hoskins] would pay all of the Stations' bills and that I would then reimburse her for the  Stations' expenses, the practice developed, as a matter of convenience for both of us, that  Sally [Hoskins] would send me various bills for reimbursable expenses and I would issue a check to pay the bill.    ++!Neither Coleman's nor King's July 1995 responses to the Commission's inquiry letters disclosed   whether, after the PSA was assigned to KSRMI in April 1995, King continued to send station   bills to the "programmer" (now KSRMI) for payment, or whether King then assumed direct responsibility for the payment of the stations' bills.   5i+!+!{Coleman was also asked whether any of the persons he employed in his role as   \programmer under the PSA were also employees of KSRMI. As noted above, Coleman had   .previously stated that the host of the local live evening interview program on KSLD(AM), Pat   .Nichols, was concurrently employed parttime by KSRMI and parttime by Coleman. Coleman   Zresponded that his only two other employees, Kurt Haider and Chris Bartells, who were employed   by Coleman as production managers for KSLD(AM)/KKISFM, also worked parttime for KSRMI at the same time they worked for Coleman.  XQ%-l+!+! U  X:&- l The responses to the May 8, 1995, letters of inquiry also provided further information as   [to the program origination capabilities of the KSLD(AM)/KKISFM main studio and the public   =service programming activities undertaken on a regular basis by Hoskins. Hoskins stated that   kshe serves as fulltime general manager of King's stations, and that King has one additional   -employee working fulltime at the stations' main studio, although it is clear that both Hoskins and   the additional employee also spend an unspecified proportion of their time on Hoskins' other"* %/++O)"   businesses. Although Hoskins was asked to specify the particular responsibilities of all personnel   assigned to the main studio, Hoskins stated only that the additional employee, Loretta Smith, is   present "to assist me on a fulltime basis." Hoskins asserted that she (Hoskins) maintains the   KSLD(AM)/KKISFM public inspection file at King's "main" studio, and that she also maintains the quarterly issues/programs lists and unspecified financial records for the stations.   1+!+!The CIB inspection confirmed that the KSLD(AM)/KKISFM "main" studio at Sam's   yPawn Shop was fully equipped for program origination, and that King actually had the fulltime   staffing at its main studio claimed in its Response. While reporting that the PSA relegated most   programming aspects of KKISFM's operations to KSRMI and that most station operations were   conducted from the "auxiliary studios" located at the KSRM(AM)/KWHQFM studios, the CIB   inspectors did not find other direct evidence that control over the stations had shifted from King to either Coleman or Davis/KSRMI.   ^Upon review of the July 1995 responses from King and Coleman to the Commission's   letters of inquiry, the staff determined that additional questions had arisen regarding the role of   KSRMI in the operation of KSLD(AM) and KKISFM both during the period when Coleman   acted as programmer under the PSA and during the subsequent period, beginning May 1, 1995,   when KSRMI itself became the programmer as a result of Coleman's assignment of the PSA to   KSRMI. Therefore, further letters of inquiry were sent to Coleman and to KSRMI on April 15,   1996, primarily seeking information regarding the roles of KSRMI and its owner, John Davis,   .in the construction of Station KKISFM in early 1994 and in the operations of KSLD(AM) and   KKISFM both before and after the PSA was assumed by KSRMI. Coleman and KSRMI filed   separate responses to the further letters of inquiry on May 13, 1996, and May 15, 1996, respectively.   NWith respect first to the construction of KKISFM, Coleman's earlier July 1995 response   [to the first letter of inquiry had stated that he had "ordered and paid for" certain equipment for   the construction of KKISFM and the relocation of KSLD(AM) broadcast operations, including   the FM antenna, the FM STL equipment, the Digilink computers and other transmission and   studio equipment, from BSW, listed on an "Invoice History Inquiry" as costing $62,734.30.   -Coleman had stated further that BSW's "Invoice History Inquiry" specified "KSRM - KSRM, Inc.   -John Davis, GM" as "Customer" because Coleman "had arranged to lease space from KSRM and   [because Mr. Davis was present in Alaska to receive the shipment on [Coleman's] behalf." The   further letters of inquiry to Coleman and to KSRMI sought additional information as to whether   Mr. Davis had any dealings with equipment supplier BSW in connection with the equipment listed on the Invoice History Inquiry. Coleman stated that while Mr. Davis "had no discussion  X!-  -with Broadcast Supply Worldwide about purchasing items for KSLD(#XP\  P6Q DXP#AM) and KKISFM," Davis   y"did talk to Broadcast Supply Worldwide to coordinate air freight shipments of the antenna for   KKIS-FM about credit, payments and extended payment plan." Davis also stated that he "talked   to Bernice McCulloch, President of B.S.W. about credit and extended payment plans for the new   equipment when advertising sales did not come even close to expectations." Coleman was also   asked to supply copies of invoices, bills of sale, or other documents relating to the equipment   <purchased from BSW. In response, Coleman submitted both "Statement of Account" documents   yand invoices from BSW. The BSW Statements of Account listed "KSRM - KSRM INC." under   the "For the Account of" heading. The invoices had separate headings for "Sold To," which   listed "KSRM - KSRM, Inc." along with its postal box mailing address, and "Ship To," which   listed "KSRM Mile 16 1/2 K-Beach Road" as the shipping location. The invoices also listed"* %/++O)" "KSRM" as the "Customer No."   X- P+!+4!The further letter of inquiry to Coleman asked specifically for proof of what entity  X-   actually paid BSW for the $62,734.30 in equipment purchased from BSW. Coleman supplied   his check registers and one cancelled check representing three payments to BSW totalling  X-  $15,309.66. Zk  {O-  wԍ One of these three payments to BSW, represented by a check register notation of Check No. 1007 for $8,000,   also includes a notation of a deposit the same date for the same amount in the form of a "short term loan." As discussed below, that deposit was made from a corresponding loan on the same date to Coleman from KSRMI. KSRMI was also specifically asked "whether [Davis] or KSRMI paid for any of   [the items which Mr. Coleman has identified [from the BSW Invoice History Inquiry] as relating   to KKISFM or KSLD(AM), either by paying Broadcast Supply Worldwide Inc. directly or by   reimbursing Coleman for any such equipment purchases, and if so; specify the amounts paid by   KSRMI/Davis." KSRMI's complete answer to this question as set forth in its April 30, 1996,  X -  0response to the letter of inquiry was "KSRM made some payments to Broadcast Supply   Worldwide, Inc. (B.S.W.) for Mr. Coleman. No reimbursements were made to Mr. Coleman."   (Emphasis added). KSRMI failed to specify the amounts it paid directly, but it must be assumed  X -  |that KSRMI directly paid the balance of the $62,734.30 total not paid by Coleman, i.e.,  X -$47,424.64. k  {O[-  ԍ In a July 30, 1996, further response to the letter of inquiry, KSRMI provided additional information related   to the question of direct payment to BSW by KSRMI. The further response from KSRMI's Davis states in its entirety on this point as follows: +4!f   f f With respect to question 7(b) of your letter, some of the invoice items listed on the "Broadcast Supply  MWorldwide History Inquiry," as well as other operating expenses, were paid directly by Mr. Coleman (and  his company Radio One) out of revenues generated by his stations. When those revenues were insufficient  >and bills had to be paid, I made loans to him. These loans are detailed in Exhibit 5d to my April 30 letter  to you. I am unable to determine the specific purpose of each amount which I loaned to Mr. Coleman.  yOe- LAs indicated in my Exhibit 5d, I kept track of all loans to Mr. Coleman, and Mr. Coleman repaid these loans in full.  {O-f +!This response fails to shed any further light on the amounts which KSRMI admittedly paid directly to BSW on Coleman's behalf.  X -  X- +4!+ Davis asserted , however, that KSRMI's employees did not participate in constructing   yKKISFM and relocating KSLD(AM)'s studios to the KSRM(AM)/KWHQFM studio location.   Rather, according to Davis, "Coleman had his own engineer do most of the work," with   additional technicians and tower riggers hired and paid by Coleman. Davis asserted that his only   [participation in the construction was to deliver some of the KKISFM transmitter equipment to the tower site with his truck.   ++!However, most of the funds used by Coleman to pay for the construction engineers were   provided by KSRMI. In addition to the amounts paid directly by KSRMI in 1994 for equipment   purchased to construct KKISFM and move KSLD(AM) to the newly constructed "auxiliary"   studio in KSRMI's building, KSRMI provided Coleman with a total of $63,349.26, in twelve   loans ranging from $2,000 to $10,000 during the period from February 18, 1994, to July 15, 1994. According to Coleman, these loans were made for the following purposes: "g  %/++"Ԍ +!+ All monies borrowed were used for KSLD(AM) & KKIS-FM. The monies borrowed  |were used along with my own funds to defray the costs of constructing KKIS-FM, to  acquire equipment for and install auxiliary studios for KSLD(AM) and KKISFM-FM at  {the KSRM studio site, and to cover operating costs . . . . I did not keep records as to the specific purpose for which the borrowed funds were used.    + +*!In response to the request in the further letters of inquiry that documents pertaining to these loans   ybe provided to the Commission, Davis and Coleman produced three different promissory notes   reflecting these loans. The first, dated April 1, 1994, in the amount of $20,000, stated that the   jloan was to be repaid on the first anniversary of the closing of a sale of one of Coleman's other   [radio stations to a third party, with no deadline or other provision for repayment if that closing   did not occur. The second promissory note, which does not bear a date of execution but was   apparently signed during the second half of 1994, is for the consolidation of the twelve loans   >made from February 18 to July 15, 1994, totaling $63,349.26, with a payment date of June 31,   z1995. The third promissory note, which was included with Coleman's response but not with   zKSRMI's, was dated April 20, 1995. This third note states a principal amount of $46,506 and   .that it is "for monies owed as a result of a debt confessed in a Confession of Judgment Before   =Action." This Note requires payment of principal and interest in full upon the closing of either   Lof two other radio station deals involving Coleman or in three years from execution, whichever  XK-  comes first, with no payments of principal or interest prior to the due date. According to Davis   and Coleman, Coleman repaid these loans in full in a series of payments to KSRMI made from December 15, 1994, to July 21, 1995.   +*!! In addition, KSRMI, upon its assumption of Coleman's rights under the PSA on April 27,   1995, paid King certain amounts that were apparently then owed by Coleman to King under the   PSA. In this regard, the further letter of inquiry asked KSRMI to provide a listing of all   payments made by KSRMI to King. KSRMI's response, at Exhibit 1A, reported a payment by   zKSRMI to King on the day after the assignment of the PSA to KSRMI, April 28, 1995, in the  X|-  amount of $9,896, which is $7,296 in excess of the May 1995 brokerage fee of $2,600.|* yO-  hԍ As noted above, the PSA, at Section 1.3, called for a monthly payment from the "programmer" to King in the amount of $2,600, in addition to the reimbursement of all operating expenses for the stations. In   addition, on June 1, 1995, KSRMI paid King both the $2,600 June PSA payment and an  XN-  [additional payment of $2,199.97.N * yO -  ԍ These payments are in addition to the direct payments by KSRMI of the KSLD(AM)/KKISFM electrical   power bill to Homer Electric Association. With respect to the power bill payments, the information provided by   xKSRMI shows two May 1995 payments by KSRMI to Homer Electric on KSLD(AM)/KKISFM's behalf totalling   $3,000, with subsequent payments for the next three months averaging $1,282 per month; thereafter, the electric   wpayments averaged $756 per month. Thus it appears that KSRMI may have been paying off a past balance with the power company for the period preceding KSRMI's assumption of the PSA from Coleman. It appears that these payments represent amounts that were previously due to King from Coleman under the PSA prior to the assignment to KSRMI.   ! +/!In addition to paying King amounts previously due from Coleman, KSRMI, upon directly   =assuming the PSA on April 27, 1995, also forgave Coleman the amounts which were supposed   to have been charged Coleman for rent for the "auxiliary" KSLD(AM)/KKISFM studios in   KSRMI's building from the time that the stations' operations were moved there in March 1994   Nthrough April 1995. Coleman and KSRMI had an oral agreement that Coleman would be"! %/++ "   charged $500 per month rent by KSRMI for the space taken by the KSLD(AM)/KKISFM   auxiliary studios. According to Coleman, this rent was one of the costs to be paid to KSRMI   .from collected sales revenues to be paid after KSRMI's costs were recovered. Coleman stated   further that "[t]he rent was not paid as the sales efforts never produced enough revenues to pay   all the monthly bills." The letter agreement by which KSRMI assumed the PSA from Coleman   stated that KSRMI assumed all of Coleman's accounts payable as of the assumption date, and this   assumption included all the back rent. Thus the auxiliary studio rent was never paid by Coleman to KSRMI.   n+/!+!According to Coleman, the agreed terms of the oral joint sales agreement between   Coleman and KSRMI provided that "[a]ll costs of producing programming pursuant to the PSA   jwere to be paid from collected advertising revenue and any excess collected revenues over the   costs of programming were to be split 50/50 by John Davis and [Coleman]." However, "no   [p]rofits were paid to [Coleman] or John Davis while [Coleman] operated the PSA because   throughout the period the revenues collected were less than what was needed to cover   [Coleman's] costs of producing programming for broadcast on KSLD(AM)/KKIS-FM under the  X-  PSA." Coleman claims he made additional capital contributions to cover the shortfalls.K  yO -ԍ As noted above, a portion of these claimed capital contributions were funded by the loans from KSRMI. While   Coleman stated that he had no records of the amount of advertising sold on the stations during   the time that he operated the PSA, Davis listed collected advertising revenues starting at $3,233   for March 1994, rising to $27,163 for the November 1994, then lowering to $9,200 for April   1995, the last month that Coleman operated the PSA. The average KSLD(AM)/KKISFM monthly advertising revenues for these fourteen months was $8,516.  X-  X- "+!!  The further letters of inquiry also asked Coleman and KSRMI about the effect of the   [assignment of the PSA to KSRMI on certain financial provisions. First, Section 1.3 of the PSA   jentered into between Coleman and King provided that each of the $2,600 monthly payments to  X-  King was to be applied to reduce the purchase price for the stations.Xc yO-  ԍ Coleman stated that the $2,600 monthly payments were intended to cover King's monthly loan payments to the Small Business Administration. Coleman and KSRMI   stated that after assignment of the PSA to KSRMI, all monthly brokerage payments made by   KSRMI to King will continue to reduce the final purchase price for the stations from King to   Coleman. Although Coleman received the benefit of KSRMI's payments reducing the purchase   price of the stations (a reduction of $39,000 for payments made by KSRMI from May 1995 through July 1996), Coleman has no obligation to repay these amounts to KSRMI.   ! +!KSRMI was also asked about Section 1.3(b)(iv) of the PSA, whereby part of the   [consideration to King for making program time available to Coleman as "programmer" was that  X-  .King would be provided up to $1,000 per month in advertising on KSLD(AM)/KKISFM or on  X -  KSRMI's stations KSRM(AM)/KWHQFM.  yO%'-  ԍ Under Paragraph 1.3(b)(iv), part of the consideration to King for making program time available to Coleman as "Programmer" was that Coleman would:  !(iv) Make available to Owner for no charge One Thousand Dollars ($1,000.00) per month worth of advertising time on the Stations and/or Stations KSRM(AM), Soldotna, Alaska, and KWHQ(FM), Kenai,"E*%/++WW|*"ԌAlaska, based on the prevailing rates charged to commercial advertisers for the classes and quantities of time used by Owner for a period of sixty months commencing March 1, 1994, provided that, to the extent that Owner does not make use of advertising time of the stated value in any month, Owner shall not have the right to carry forward such unused value to any subsequent month, and provided further that Programmer shall have the right to limit the amount of advertising on stations KSRM and KWHQ made available to Owner during any month which falls wholly or partly within 45 days of a primary election, or 60 days of a general election, even to the extent of providing Owner with no advertising in any such month, but if Programmer exercises this right, this Agreement will automatically be extended for that number of months which is equal to the number of months in which Programmer elected not to make available to Owner the  lfull value of advertising on Stations KSRM and KWHQ specified in this subsection. The obligation to provide advertising time will survive any termination of this Agreement for reasons other than a material default by Owner under this Agreement or the Purchase Agreement.   At the time the PSA was executed by Coleman and King, KSRMI, as licensee of KSRM(AM)/KWHQFM, was not a party to the PSA. KSRMI assumed Coleman's role as "Programmer" over one year later, on April 27, 1995. Davis stated that from March 1, 1994, through" H %/++"   April 30, 1995 (during the period prior to Coleman's assignment of the PSA to KSRMI),   .KSRMI's stations KSRM(AM) and KWHQFM carried approximately $9,000 in advertising for King's other, non-radio businesses without payment from King or Coleman.   _+!+ !The May 8, 1995, letter of inquiry to King and the April 8, 1996, letter of inquiry to   KKSRMI also sought information regarding actual programming efforts undertaken by King during   the operations under the PSA. King responded that it oversees public services announcements   broadcast on the stations, but that the announcements themselves are recorded by the   programmer's (Coleman and subsequently KSRMI) employees and inserted in the satellite   delivered programming by automation computer. King also stated that a weekly 15-30 minute   =live interview public affairs program was broadcast "at our direction." KSRMI responded that   during the period when it served as programmer under the PSA (May 1995 to the present), "King   has been providing continuous public affairs programming on KKIS-FM." However, of the three   regular public affairs programs listed by KSRMI, none is actually produced by King or its   employees two are produced by unrelated third parties and one is produced by KSRMI  X -  employees.V H k yO-  ԍ One of the programs, a monthly half-hour live interview program ("The Alliance Report") is produced by an   independent radio producer and public relations company. The second program ("Crimestoppers") consists of two   weekly one-minute programs produced by the local police department. According to KSRMI, the third program   i("KKISFM-In Touch"), weekly local interview program, "is produced by KSRM, Inc. employees with interviews and subject matter approved by King Broadcasters, Inc."V Although KSRMI also stated that King's President, Sally Hoskins, has also "phoned   or faxed in news tips and information on civic activities that she wanted covered and has sent   public service announcements for us on KKIS-FM and KSLD(AM) when it was on the air," the actual coverage and broadcasting of that information was produced by KSRMI employees.   + !+ !KSRMI also was asked to provide information regarding the payment of KKISFM's   yoperating expenses for the period beginning with KSRMI's assumption of the PSA on April 27,   [1995. KSRMI stated in response that King pays for its own business telephone for the "main"   xstudio located at King's other businesses' location (not for the "auxiliary" studio). King "usually"   pays the station's power bill but is reimbursed by KSRMI for those payments. The process King   follows in obtaining reimbursement for the station's power bill is to telephone John Davis and   advise him orally of the amount King has paid. KSRMI then writes King a reimbursement   check. In addition, "on occasion," KSRMI paid the power bill directly to avoid late charges. " %/++"   Insurance for the stations is also paid by King. Since becoming the programmer, KSRMI entered   into two satellite programming agreements with ABC Radio Networks for KKISFM, for the "Hot   AC" format for the daytime, and for "Z Rock" for the nighttime. The Hot AC agreement was   executed by Tom Farrell, an employee of KSRMI, and the Z Rock agreement was executed by   John Davis, President of KSRMI, in each case with the notation of KSRMI as "LMA Operator." King did not execute either agreement. KSRMI pays ABC directly for both program services.   X_- O+ !+!   Coleman and KSRMI were also asked about their involvement in the decision to take  XH-  yKSLD(AM) off the air in February 1995.Hq yO -  ԍ Specifically, Coleman was asked the following: "State whether, to your knowledge, John Davis or any   employee of KSRMI participated in any discussions with you or King regarding the decisions to take Station   KSLD(AM) off the air or to keep KSLD(AM) off the air, and if so, set forth the substance of each of those   discussion, the dates, the participants, and the nature of Davis's or other KSRMI employees' involvement in those   discussions." KSRMI was asked the same question, directed to Davis' or KSRMl's employees' involvement in these decisions. Coleman states that the decision to take KSLD(AM)   off the air was made by him in consultation with John Davis, and that he told Hoskins of his decision:  m+! WI discussed the lack of interest in the sales staff of KSRM, Inc. to sell the KSLD(AM)  oldies format with John Davis and we concluded that the joint sales agreement with  respect to KSLD(AM) should be terminated. It did not make business sense for me to  Bcontinue to program KSLD(AM) under the PSA in the absence of a joint sales  larrangement. The KSLD(AM) decision was made by myself after discussions with John  Davis about the sales problems. I told Sally that I wanted to reduce my losses without  1abandoning my plans to consummate the sale of KSLD(AM) and KKISFM after the F.C.C. approval of this long pending transfer.    W+!Davis states that he had several discussions with Coleman regarding the decision to take   <KSLD(AM) off the air due to poor advertising sales. Although Davis does not acknowledge that   he participated in any discussions with King on this subject, he does assert that "it was decided by Mr. Coleman and King Broadcasters, Inc . . . that station KSLD(AM) would go 'off the air.'"   X- !+!+!Discussion. Petitions to deny and informal objections must, pursuant to Section 309(e)   of the Communications Act of 1934, as amended, provide properly supported allegations of fact   -which, if true, would establish a substantial and material question of fact regarding whether grant  Xe-  of the application would be consistent with the public interest, convenience, and necessity. See  XN-  LWWOR-TV. Inc., 6 FCC Rcd 193, 197 n.10 (1990). Furthermore, in assessing the merits of such   pleadings, the staff must use a two-step analysis under Section 309(d)(1) and (2) of the  X -  Communications Act. The first step is whether or not a prima facie case has been made. If so,   we next consider whether or not there is a substantial and material question of fact to warrant   inquiry. Thus, in assessing both the petition to deny and the informal objection, the primary   issue is whether or not substantial and material questions of fact have been raised to warrant further action by the Commission.  +!+ Section 310(d) of the Communications Act states, in pertinent part:   !+ + No construction permit or station license, or any rights thereunder, shall be transferred,"h$@%/++F#"  assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly,  or by transfer of control of any corporation holding such permit or 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.   L+ + !47 U.S.C.  310(d). Section 73.3540(a) of the Commission's Rules states that "[p]rior consent of the FCC must be obtained for a voluntary assignment or transfer of control."   ?+ !+>!There is no exact formula by which control of a broadcast station can be determined. In   ascertaining whether a transfer of control has occurred, we traditionally look beyond the legal   title to whether a new entity or individual has obtained the right to determine the basic operating  X -  policies of the station (i.e., to affect decisions concerning the personnel, programming or  X -  Lfinances of the station). See WHDH. Inc., 17 FCC 2d 856 (1969), aff'd sub nom. Greater Boston  X -  Television Corp. v. FCC, 444 F.2d 841 (D.C. Cir. 1970), cert. denied, 403 U.S. 923 (1971).   Although a licensee may delegate certain functions to an agent or employee on a day-to-day  X -  basis, e.g., Southwest Texas Public Broadcasting Council, 85 FCC 2d 713, 715 (1981), such   delegation cannot be wholesale. That is, those parties delegated to a task must be guided by  Xy-  >policies set by the permittee or licensee. See David A. Davila, 6 FCC Rcd 2897, 2899 (1991).   In several cases, the Commission has permitted the use of a time brokerage agreement where the   Lbroker is also the proposed assignee of the station, as long as the time brokerage agreement is   consistent with the Commission's rules and guidelines, so that ultimate control remains with the  X-  licensee until the grant of the application and closing of the transaction. See, e.g., Roy R. Russo,  X-5 FCC Rcd 7586 (MMB 1990); Joseph A. Belisle, supra, 5 FCC Rcd 7585.  X- 0+>!+/!Transfer of Control from King to Coleman and KSRMI. After evaluating all the relevant   jfacts here, we conclude that King apparently engaged in an unauthorized transfer of control of   KSLD(AM) and KKISFM to Coleman and then to KSRMI, which began upon the execution and   implementation of the PSA by King and Coleman in February 1994 and continues to the present.   We find two facts particularly compelling. First, by Coleman's own admission, King was merely   z"told" of Coleman's business decision to take KSLD(AM) silent in February 1995. We view   -King's lack of involvement in this decision as definitive evidence that King has abdicated control   over the station. Second, King has no ownership or control over KKISFM's equipment and has   no right to utilize the essential broadcasting equipment in the absence of the PSA. Indeed, as   discussed below, the evidence strongly indicates that Coleman and KSRMI have virtually complete control over KSLD(AM) and KKISFM's financial matters.   X - 5i+/!+!{Station Finances. We note first that, contrary to Coleman's assertions, the express terms   [of the PSA are not completely consistent with radio time brokerage agreements that have been   approved by the Commission. Additionally, while the PSA states that King is to retain ultimate   Zcontrol over programming and operations of the station, the parties in practice have gone beyond   [the terms of the PSA, especially in the area of financial relationships, in turning over control to   Mthe broker. These financial relationships are important factors to be considered in weighing  X:&-  =whether there has been an unauthorized transfer of control of the stations. See Roy M. Speer, 11 FCC Rcd 18393, 1841517 (1996).   3+!+!First, the PSA at Paragraph 1.3 requires the "programmer" -- first Coleman and   subsequently KSRMI -- to "reimburse" King for "all costs of operating the Stations," including")%/++n("  X-  electrical power, liability insurance,X  yOy-  hԍ While the parties suggest that King continued to pay for liability insurance notwithstanding this provision, this   happarently was done because King's insurance coverage for the stations was included under a blanket insurance policy  yO -Hoskins held for her other businesses. No other station expenses were paid by King.#H\  P6Q?P#ѿ and the salary for a King management employee. In   addition, once the PSA went into effect, virtually all programming and broadcast operations were   originated from the KSLD(AM)/KKISFM "auxiliary" studios which Coleman and KSRMI  X-  Zconstructed in K#XP\  P6Q DXP#SRMI's building housing its KSRM(AM)/KWHQFM broadcast studios.  yOT-  ԍ It cannot be argued that the "auxiliary" studios were not the primary broadcast origination point for   KSLD(AM)/KKISFM. Upon their construction, the KSLD(AM) studio transmitter link ("STL") was moved there,   the KKISFM STL was installed there, and the KSLD(AM)/KKISFM "main" studios remained capable of program   origination only by virtue of a remote pickup station. Moreover, as discussed below, the parties have not asserted   Ythat any significant amount of programming has ever been broadcast from the "main" studios after the construction   of the "auxiliary" studios. While there is no longer a rule requiring that a minimum amount of programming be   originated at the main studio of a broadcast station, it is certainly relevant in determining the locus of control in this   Jcase to recognize that the licensee's management-level employee and her assistant are virtually never present at the   location from which all the stations' programming originates, and that the licensee has no physical or legal control over the stations' auxiliary studios from which all such programming is originated. King   jhad no financial responsibility whatsoever for the construction, maintenance, and operation of   mthose auxiliary studios throughout the term of the PSA, either while Coleman was the   "programmer" or later while KSRMI was the "programmer." Although KSRMI suggests that   while it was the programmer, King was responsible for its own business telephone, KSRMI is   .referring to the telephone for the "main" studio located at King's other businesses, not for the   =stations' main telephone located at the KSRM(AM)/KWHQFM studios. The only significant   station expense for which King has been billed is for the transmitter electrical power, which has   been either paid directly by Coleman or KSRMI or paid by King who was then reimbursed by   KSRMI. Again, however, the electrical power for which King is preliminarily billed does not   include the power for the stations' auxiliary studios, only for the transmitter and the fallow "main" studio.  V -  X- 0+!C! Although reimbursement of all basic station operating expenses by a broker may not be   -improper in itself, direct payment of basic station expenses by the broker is a factor that has been   =considered by the Commission in determining whether an unauthorized transfer of control has  XK-  taken place. See e.g., Roy M. Speer, supra, 11 FCC Rcd at 18416; WGPR Inc., 10 FCC Rcd   8140, 8145 (1995). Nor do the cases cited by Coleman sanction the direct payment of basic  X-  station expenses by the broker. For example, in J. Dominic Monahan, supra, 6 FCC Rcd 1867,  X-  cited by Coleman, the licensee continued to pay "all its own operational expenses . . . ." In Peter  X-  |D. O'Connell, supra, 6 FCC Rcd 1869, also cited by Coleman, the licensee paid its own   iemployees, and there was no suggestion in that decision that the broker assumed any operational  X-  expenses for the brokered station. In Joseph A. Belisle, supra, 5 FCC Rcd 7585, a set monthly   Lamount was specified to "power costs," but no other operational costs of the brokered station were assumed by the broker.  In practice, moreover, Coleman and King did not bother with the detailed   "reimbursement" procedures set forth in the PSA whereby King was to present monthly itemized   statements of expenses paid by King and then be reimbursed by Coleman. Rather, for   "convenience," Coleman paid all expenses directly, and if King received any bills from vendors,  X -they were sent to Coleman for direct payment. "  %/++="Ԍ X- |ÙC! +%!In addition and, as noted, of particular importance, pursuant to the PSA Coleman and   KSRMI purchased or leased essentially all the studio and transmitting equipment that was   necessary to place then unbuilt station KKISFM into operation, and King has no ownership or   yother rights in that equipment. While King submitted in response to the Commission's letter of   inquiry a cancelled check for $8,000 to an engineering consultant in partial payment for his   assistance in obtaining equipment to construct KKISFM, this consulting agreement preceded the   Coleman PSA, and Coleman (who claims he oversaw construction of the station) had no idea   what services or equipment, if any, were provided for this consulting fee. Additionally, Hoskins   did not claim that any equipment +%!+4!was actually purchased by King for KKISFM pursuant to this   consulting agreement or otherwise. Without the transmitter, antenna, and other essential equipment owned or leased by Coleman, the station would not be capable of operation.  +4!+4! Coleman's and KSRMI's payment of all operational expenses and of the costs of   constructing KKISFM and relocating KSLD(AM) go beyond the time brokerage arrangements   \permitted in the cases cited by Coleman. +4! + !Indeed, the present case is indistinguishable from  X -  {Salem Broadcasting. Inc., 6 FCC Rcd 4172 (MMB 1991), where the time broker's complete   construction of the new station's facilities was determined to be a primary indicator that an  Xy-  unauthorized transfer of control had taken place. As in the present case, the broker in Salem had  Xb-  -selected the program format for the new station. The Bureau in Salem also found to be significant   as to the lack of financial control by the permittee the fact that the net amount received by the   permittee from the broker monthly for the right to broker the station was very small (a net   {payment of $20 monthly after deducting an equipment lease payment from the brokerage   payment). In the present case, while the monthly brokerage payment is significantly higher than  X-  in Salem and there is no cost to King for "leasing" any equipment from Coleman (which certainly   in itself does not suggest that King has retained control since King has no right to use the   .equipment if the time brokerage were terminated), the monthly payments to King are deducted  X-from the total sales price of the stations.k yO#-  iԍ As Coleman has reported, the purchase price has, as of May 1996, been reduced by over $77,000 to reflect the deduction of monthly payments under the PSA.  X|- + !+ !We note that the permittee in Salem had similarly argued that the time brokerage   agreement did not vary from the brokerage agreements discussed above, to which the Bureau responded as follows:  + !+fWe reject your suggestion that the Salem/Hilber arrangement comports with the Bureau's  recent time brokerage decisions. When a "broker" takes on the characteristics of a lessee  by infusing capital into the station and becoming intimately involved in decisions as to  Nthe construction and/or operation of a station, it transcends the traditional function of a  X - 0time broker -- the purchase and sale of air time . . . . In these cases, [ yO%-ԍ The Bureau was specifically referring to Russo, supra, 5 FCC Rcd 7586, and Belisle, supra, 5 FCC Rcd 7585. and those decided  X!- /subsequent,![ yO(-  Zԍ Citing Brian M. Madden, 6 FCC Rcd 1871(MMB 1991); Peter D. O'Connell, supra 6 FCC Rcd 1869 (MMB  yO(-1991); and J. Dominic Monahan, supra 6 FCC Rcd 1867. there was no evidence that the broker had (or would) infuse the station with  ]working capital, buy equipment for the station, choose a format, or otherwise participate in or finance construction of the station."#%/++""Ԍ X-  ԙ+f+!6 FCC Rcd at 4173. Similarly, in Roy M. Speer, supra, 11 FCC Rcd 18393, the Commission   =found that a permittee had engaged in an unauthorized transfer of control where employees of   -a non-voting minority stockholder had supervised the construction of the new television station,   the non-voting stockholder had paid for the purchase of the station's equipment though loans to   the permittee, and the permittee was not even aware of what equipment was being purchased for   it or how much was being spent by the non-voting stockholder pursuant to these loans. In the   present case, not only was the station constructed without any significant involvement by King,  X_-but King does not have any ownership or control over the station's physical facilities.x_*5 yO-  <ԍ In this respect, the present case differs significantly from Choctaw Broadcasting Corporation, 12 FCC Rcd  yO -  J8534 (1997). In that case, although the time broker paid for the new station's equipment, the permittee leased that   Lequipment from the time broker and thus had a right to use that equipment if the brokered programming was   wterminated. Moreover, if the assignment application in that case was not consummated, the permittee was obligated   Jto purchase the station's equipment from the time broker, who was obligated to sell the equipment to the permittee.  yO -  hIn addition, in Choctaw, the permittee maintained a higher degree of involvement in the construction and operation of the station than was evidenced by King in the present case.  X1- +!+ !Station Programming and Personnel. The record does not unequivocally establish the   same clear and overwhelming control over station programming and personnel by Coleman and   KSRMI as it does with respect to station financing. It does, however, document a level of   <intrusion in these areas which, taken together with Coleman's and KSRMI's domination of station   finances and King's passivity in the decision to take KSLD(AM) silent, supports our conclusion that an unauthorized transfer of control appears to have taken place.  As noted above, the PSA provided Coleman as programmer the right to program   i"substantially all" of both stations' air time, reserving to King up to eight hours per week between   Lmidnight and 6 am each day (and 7-9 am Sunday) for the broadcast of news, public affairs, and   kother programming produced and/or selected by King. However, neither King nor Coleman   asserted that King has ever actually reserved any such time for these purposes. While Hoskins   suggested in her response to the letter of inquiry that she "over see[s] the public service   announcements and issues are selected for our public affairs programming," both she and   [Coleman stated that those public service announcements were actually recorded by Coleman's   employees during the period when Coleman served as programmer under the PSA. In addition,   a weekly 15 to 30 minute live public affairs program which Hoskins claimed was recorded from   a local hotel "at our direction," also appears to have been produced and hosted by Coleman's   employees. Similarly, when KSRMI became programmer after Coleman assigned the PSA to it   on April 27, 1995, the public affairs programming on KKISFM was produced not by King but rather by KSRMI employees or by third parties.  + !+%!KSLD(AM), until being taken off the air in February 1995, carried satellite-delivered   network programming pursuant to a contract entered into originally by the prior time broker,   Cobb Communications, and paid for by Coleman during the term of Coleman's PSA. From its   yinception, KKISFM has carried satellite-delivered programming pursuant to a contract entered   yinto directly by Coleman with Satellite Music Network. As noted above, KSRMI subsequently   entered into new satellite programming agreements for KKISFM after KSRMI became the   programmer of the station. While Hoskins claims that she monitors all programming from the "main" studio located at the site of her other businesses, all programming not delivered by ""%/++!"   satellite feed is originated from the auxiliary studios constructed by Coleman at the studios of  X-Davis' KSRM(AM)/KWHQFM. H  yOb-  ԍ Peninsula also alleged that King attempted to mislead the Commission that the KSLD(AM)/KKISFM "main"   studios are located at her place of business (Sam's Pawn Shop), rather than at what King claims are "auxiliary"   studios at KSRM's studios, in order to mislead the Commission as to King's on-site supervision of the stations. The   evidence, including the results of the CIB's on-site inspection, demonstrates that the facilities at the ''main" studio   hare capable of conducting over-the-air broadcasting. While it does not appear that the main studio has actually been   used by either KSLD(AM) or KKISFM since the PSA went into effect, there is no basis for concluding that the "main" studio is a sham, or that there has been a violation of the main studio rules by King.  +%!%!In addition, notwithstanding Peninsula's contentions regarding the sharing of KKISFM's call sign with a   station owned by Coleman in California, we do not believe that Coleman's involvement in the call sign change for  yO2 -  xKKISFM has substantial legal significance in determining control over the station. Furthermore, as noted supra,  yO -  the call sign of Coleman's California station has since been changed. Peninsula also alleged, in its "Supplement to   Comments" filed January 11, 1996, that King's abdication of control over the stations was further reflected in an   1bankruptcy filing made by Hoskins in August of 1995, wherein she allegedly failed to list Stations   YKSLD(AM)/KKISFM as assets. King's "Supplemental Response to Comments of Peninsula Communications, Inc.,"   received by the Commission on February 20, 1996, demonstrated that Peninsula's allegation was in error, and that Hoskins did list her interest in the stations as a personal asset in her bankruptcy filing.  O+%!+4!With respect to King's participation in the stations' personnel matters, Peninsula has   \alleged in its Petition to Deny that, subsequent to adoption of the PSA, Coleman fired King   employees Ron Holloway and Dan Donovan. We are satisfied that while Coleman may have   been present when those terminations were communicated to Holloway and Donovan, Hoskins   was present as well, and it is uncontested that the termination letters themselves were signed by   Hoskins, not Coleman. However, while Hoskins claimed in her response to the Commission's   letter of inquiry that she "report[s] to work to the main studio as General Manager each day and   Loretta Smith is here to assist me on a fulltime basis," she failed to respond to several specific   =questions in that letter of inquiry as to what her and her employee's specific duties were at the   jmain studio, who paid the employee's salary, and what precise functions were performed at the   main studios (Question 5 of the letter of inquiry to Hoskins). By contrast, the employees   Linvolved in programming aspects of the station were employed by Coleman or by KSRMI, and   the employees involved in sales of advertising were employed by KSRMI, which, while Coleman   >was programmer, sold advertising for the stations pursuant to an oral joint sales agreement  Xy-  between Coleman and KSRMI. Due to Hoskins' failure to respond directly to the letter of inquiry   regarding King's employees' responsibilities, we must conclude that those employees did not have   =any significant role in the stations' operations. In sum, no evidence that King retained control   over the personnel employed by KSLD(AM)/KKISFM has been presented that is inconsistent with our conclusion that an unauthorized transfer of control appears to have taken place.  X- +4!+!Conclusion Regarding Control. +!+/!We have thus determined, based on the totality of   circumstances in the present case, that King apparently abandoned control of stations KSLD(AM)   Nand KKISFM starting on February 16, 1994, when the PSA with Coleman was executed.   ZHowever, it appears that control of the stations at that point in time was not assumed by Coleman   alone; rather, we conclude that the construction of KKISFM, the relocation of KSLD(AM), and   the subsequent operation of both stations was a joint venture of Coleman and KSRMI, and that   KSRMI's involvement in the operation of the stations during the time that Coleman served as   "programmer" under the PSA was not limited, as the parties suggest, to the sales of advertising"N%/++|"   -pursuant to the joint sales agreement. Rather, KSRMI appears to have exercised control over the   stations during this period preceding the assignment to it of the PSA to at least an equal degree   .as Coleman. In addition, because KSRMI already owned and controlled one AM and one FM   station (KSRM(AM) and KWHQFM) in the relevant local market, its actions in serving as time   Lbroker (jointly with Coleman) of an additional AM station and an additional FM station during   the period from March 1994 to February 1995 (when KSLD(AM) went silent) exceeded the   maximum of three stations that a single entity could control and/or broker in a market this size  X_-  ]under the multiple ownership rules in effect at the time.( _ yO-  iԍ The letter of inquiry also asked KSRMI to respond to the allegation made by Peninsula that when Coleman   formally assigned the PSA to KSRMI on April 27, 1995, it was then in violation of Section 73.3555(a)(1) because   ,it owned or brokered three radio stations out of six stations in the relevant radio market (KSLD(AM) by then being   off the air). KSRMI's response asserted that there are actually thirteen stations that intersect the 5 mV/m contour   for AM or the 3.16 mV/m contour for FM of stations KSRM(AM), KWHQ-FM, and KKISFM. Peninsula had   hasserted that there were only six stations in the relevant market. To resolve this discrepancy, the staff subsequently   undertook its own analysis of the relevant market, and has determined that there are thirteen stations in the market.   Thus, the multiple ownership violation by KSRMI ended with KSLD(AM) being taken off the air in February 1995.   We note that by the time that KSLD(AM) returned to the air in November 1996, Section 73.3555(a)(1) had been   revised to reflect the increased levels of local radio ownership mandated by the Telecommunications Act of 1996.   Therefore, at the time that KSLD(AM) returned to the air, KSRMI's ownership of an AM station and an FM station,   coupled with its attributable interests in KSLD(AM) and KKISFM through the PSA for a total of four stations   jԩ was permissible under Section 73.3555(a)(1). In this regard, in markets of 14 or fewer stations, an entity is   Kpermitted to have attributable ownership interests in up to five stations, no more than three of which are in one   service, so long as the stations do not represent more than 50 percent of the total stations in the relevant local radio  yO-market. See supra note 7.( See 47 C.F.R.  73.3555(a)(1)(i) (1995) (amended 1996).  +/!+!It is true, as Coleman and KSRMI maintain, that the Commission has deregulated joint  X -  jsales arrangements that do not involve time brokerage or joint programming arrangements. See  X -  Revision of Radio Rules and Policies, supra, 7 FCC Rcd 2755, 2787. However, in this case,   MKSRMI's relationship to Coleman during the period from February 1994 to April 1995, when   LColeman assigned the PSA to KSRMI, is not limited to a joint sales agreement. It was KSRMI,  X -  Nnot Coleman, which directly paid the equipment supplier, BSW,VX   yOh-  ԍ Although Coleman apparently obtained a used transmitter and other items from the Trustee for KOLA, Inc.,   ,that equipment was purchased from the Trustee a year later for only $6,000. Thus its value is much less significant than the equipment purchased by KSRMI from BSW.V the bulk of the cost of   =constructing KKISFM and relocating KSLD(AM). In addition, KSRMI was not only listed as   kthe delivery point for the equipment, it was also separately listed repeatedly by BSW as the   z"customer" and account holder for the equipment purchase. KSRMI's Davis did not merely   coordinate deliveries from BSW for convenience, rather, he negotiated extended payment terms,   \which was critical to him because KSRMI paid the BSW equipment bills. What was paid by   Coleman for equipment purchases was primarily loaned to him by KSRMI through less-than  arms-length loans that were documented well after the funds were advanced to Coleman, initially   .with open-ended repayment obligations that attached only when Coleman obtained cash from   kother enterprises, if at all. KSRMI loaned operational funds to Coleman as well, and did not   collect the auxiliary studio rent that was supposedly being charged by KSRMI to Coleman for   this purpose. In addition, Coleman's time brokerage employees were all part-time KSRMI employees. "|0%/++"Ԍ +!+%!We also find that certain of the other financial relationships between Coleman and   KSRMI indicate that the time brokerage, and indeed the assumption of control of the stations   Lfrom King, were essentially a joint venture between Coleman and KSRMI, whereby risk of loss   Lor potential for profit was shared by KSRMI and Coleman. In this regard, we find it significant   that as part of the original PSA terms between King and Coleman as programmer, entered into   when KSRMI was ostensibly not a party to the PSA, King was promised and provided up to  Xv-  $1,000 per month of free advertising on KSRMI's stations KSRM(AM) and KWHQFM. We   also find it significant that under the oral joint sales agreement between Coleman and KSRMI,   -Coleman never received any of the proceeds of advertising sales made on KSLD(AM) and KKIS  ?FM, even when total sales exceeded $27,000 in the month of November 1994. Rather, all   advertising sales revenues were retained by KSRMI to pay KSRMI's selling costs. Conversely,   xin those months where advertising sales did not cover KSRMI's costs, Coleman had no obligation   =to KSRMI to make up for such shortfalls -- those risks of loss were assumed by KSRMI alone.   In addition, the payments to King of $2,600 per month under the PSA that were made by KSRMI  X -  after the assignment of the PSA to KSRMI (as well as those past due payments made by KSRMI   to King on the day KSRMI took over the PSA) continued to reduce the purchase price for the   stations to Coleman as provided in Paragraph 1.3 of the PSA, but Coleman is under no obligation   to repay these amounts paid by KSRMI even though Coleman will receive the benefit of the   substantially reduced purchase price. Further, although Coleman has contracted to purchase   KSLD(AM)/KKISFM from King for $330,000, Coleman has provided an option to KSRMI to  X8-  Lpurchase KKISFM for only $100,000, and this price for KKISFM alone was set after Coleman   land KSRMI had taken KSLD(AM) off the air, with only very minimal plans to return it to   operation. This same option agreement authorizes KSRMI to sell KKISFM to a third party that   <wishes to purchase KSRMl's stations, without Coleman's approval, as long as the price for KKIS  !FM is at least $500,000. If that price for KKISFM is obtained, the first $100,000 goes to   Coleman, but the remainder of the purchase price is split equally by KSRMI and Coleman.   lThese financial terms are indicative of a joint venture in the construction, operation, and acquisition of KKISFM and KSLD(AM).  ^+%!+ As a final matter, we address the issue raised in the informal objection filed herein by   William J. Glynn, Jr. As noted above, Glynn claims that Davis has repeatedly broadcast over  X=-   + +*! KSRM(AM), KWHQFM, and KKISFM announcements encouraging listeners to file   lapplications for a new FM allocation at nearby Kasilof, Alaska. Glynn alleges that these   jannouncements represent an anti-competitive effort by Davis to generate multiple applications   so that the allocation will be tied up in protracted hearings. Even assuming that the  X-  yannouncements described by Glynn were in fact broadcast,:X+S yOZ"-  Kԍ Glynn's allegations are deficient because they are not supported by an affidavit setting forth precisely what   -was allegedly broadcast. This failure makes it nearly impossible to evaluate the legal significance of such alleged announcements.: we do not believe that Glynn has   demonstrated that the broadcast of such announcements would raise a substantial and material   question of fact that warrants further inquiry. While Glynn would have us presume an improper,   [anti-competitive motive behind encouraging numerous interested parties to apply for the open   allocation, the Commission in other contexts has stated that the public interest is served by a  Xn$-  choice among a number of qualified applicants. See, e.g., Azalea Corp., 31 FCC 2d 561, 563   [(1971). Moreover, there is no record evidence that Davis arranged or paid the expenses of any   -applicant for the Kasilof allotment or that there was any other violation of the Commission's rules"@&%/++%"   .or policies. For these reasons, Glynn's claims are speculative and do not demonstrate that the grant of the present application would not be in the public interest.  +*!+/!As stated above, we have concluded that King apparently engaged in an unauthorized   transfer of control of Stations KSLD(AM) and KKISFM to Coleman and KSRMI jointly, during   the period starting on or about February 16, 1994, and continuing through April 26, 1995, and   to KSRMI alone from April 27, 1995, to the present, in willful violation of Section 310(d) of the   Communications Act of 1934, as amended, and Section 73.3540 of the Commission's Rules. In   addition, we find that KSRMI's brokerage of the stations during the period starting in March   y1994, when KKISFM went into operation, until February 1995, when KSLD(AM) was taken off   `the air, resulted in KSRMI violating the local multiple ownership rule, 47 C.F.R.   73.3555(a)(1)(i), because during that time KSRMI exercised control over four stations in a local   radio market containing thirteen radio stations. A transfer of control violation could warrant   irevocation of King's, Coleman's and KSRMI's authorizations if the transfer and the accompanying   multiple ownership rule violation were intentionally concealed from the Commission through  X -  misrepresentations or lack of candor. See, e.g., Roy M. Speer, supra, 11 FCC at 18428; Black  X-  Television Workshop of Los Angeles. Inc., 8 FCC Rcd 4192, 4198 (1993); Silver Star  Xy-  Communications-Albany. Inc., 6 FCC Rcd 6905, 6907 (1991). Here we find that there is no   ksubstantial and material question of fact that either King, Coleman, or KSRMI acted with an   /intent to deceive the Commission. Therefore, we shall not designate for revocation King's,   Coleman's, or KSRMI's Commission authorizations. Nor do these apparent violations require the   denial of the assignment of license application. Rather, we believe that monetary forfeitures  X-against both King and KSRMI are the appropriate sanction. yO-  ԍ License renewal applications for KSLD(AM) and KKISFM were granted on January 28, 1998. Coleman's   ;participation in the unauthorized assumption of control of the stations concluded in April 1995. The provisions of   47 U.S.C.  503(b)(6), which sets forth statutory limitation periods under which forfeitures may be assessed, therefore   Jpreclude us from issuing a forfeiture to Coleman. For the same reason, we have not taken into account the multiple   ownership violations in determining the forfeiture assessed against KSRMI, because the violation occurred outside the period for which a forfeiture may be assessed.   ^+/!+!We have considered the factors set forth in 47 U.S.C.  503(b) as well as Commission   precedent concerning similar violations in order to determine the appropriate amount of the fine  X-  imposed. @K {O-  ԍ In United States Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 1994), the United States Court of Appeals  {Oe -  ifor the District of Columbia Circuit vacated the Policy Statement, Standard for Assessing Forfeitures, 6 FCC Rcd  {O/!-  K4695 (1991), recon. denied,  7 FCC Rcd 5330 (1992), revised, 8 FCC Rcd 6215 (1993). In accordance with the  {O!-  court's decision, and after notice and public comment, the Commission adopted Forfeiture Guidelines, 12 FCC Rcd   K17087, which became effective October 14, 1997. The apparent violations of Section 310(d) of the Act and of   ,Section 73.3540(a) of the Commission's rules here were continuing in nature, but commenced prior to the effective   date of the new guidelines. With respect to apparent violations occurring before the effective date of the new   guidelines, the Commission has determined to consider the criteria developed under Section 503 and applied by the Commission in previous cases, and we have done so here. 12 FCC Rcd at 1710809.  In Salem Broadcasting, Inc., supra, 6 FCC Rcd 4172, 4173, the licensee was fined   $10,000 for an unauthorized transfer of control and a main studio rule violation that existed for  X|-  a period of approximately ten months.!|K yOE)-  ԍ The Salem Broadcasting. Inc., decision does not clearly delineate what portion of this forfeiture was assessed for the unauthorized transfer of control, and what portion was assessed for the main studio rule violation. Salem, like the present case, involved a   Nbrokerage/programming agreement that, as effectuated, was determined to constitute an"ep!%/++"  X-  [unauthorized transfer of control. In Roy M. Speer, supra, 11 FCC Rcd 18393, the permittee was   =assessed a forfeiture of $25,000 for its participation in the unauthorized transfer of control that   xwas limited to the construction phase, and the non-voting stockholder that was found to engaged   Kin the unauthorized transfer which also resulted in the violation of the duopoly rule was assessed  X-  a forfeiture of $150,000. In Silver Star Communications-Albany, 6 FCC Rcd 6905 (1991), the   licensee of an AM/FM combination was fined $20,000 for an unauthorized transfer of control of  Xv-  the two stations over a period of 18 months. In First Broadcasting Corp., 3 FCC Rcd 2758   .(1988), the licensee of an AM station was fined $20,000 for an unauthorized transfer of control   =effectuated through unreported stock transactions. Although the licensee filed an assignment  X1-  application two years after the stock transactions took place seeking nunc pro tunc approval of   the transfer, the $20,000 forfeiture was assessed for the full six-year period that the unauthorized  X -  transfer continued. In Cate Communications Corp., 60 RR 2d 1386 (1986), a forfeiture of   $20,000 was affirmed by the Commission for the unauthorized transfer of control of an AM station for a period of 13 months.  +!+ !In view of the above, pursuant to Section 503(b) of the Communications Act, King   yBroadcasters, Inc. and KSRM, Inc. are hereby advised of its apparent liability for a forfeiture of   [Ten Thousand Dollars ($10,000.00) each for the willful and repeated violation of Section 310(d)   of the Communications Act and Section 73.3540 of the Commission's Rules. In regard to this   forfeiture, King and KSRMI are each afforded a period of thirty (30) days from the date of this   Notice to show, in writing, why a forfeiture penalty should not be imposed or pay the forfeiture.   Any showing as to why the forfeiture should not be imposed or should be reduced shall include   <a detailed factual statement and such documentation and affidavits as may be pertinent. 47 C.F.R   = 1.80(f)(3). Other relevant provisions of Section 1.80 are summarized in the attachment to this Notice. + !+!  ?+!+4!In light of the above, we find that there are no substantial and material questions of fact   that warrant further inquiry in a hearing. Accordingly, the Petition to Deny the application to   assign the licenses of stations KSLD(AM) and KKISFM, Soldotna, Alaska, from King   Broadcasters, Inc., to Chester P. Coleman (File Nos. BAL-940401EA and BALH-940401EB),   filed May 13, 1994, by Peninsula Communications, Inc., is DENIED. In addition, the informal   objection filed by William J. Glynn, Jr., IS DENIED. Having found that King and Coleman are   qualified to assign and purchase stations KSLD(AM) and KKISFM and that the sale would   further the public interest, convenience and necessity, the applications ARE GRANTED.   1However, to the extent that Coleman intends to continue the PSA with KSRMI upon   consummation of the assignment application, we caution Coleman to take all necessary steps to   ensure compliance with the Commission's policies concerning the implementation of agreements   [in which a broker/licensee supplies programming to a station. The Commission has repeatedly   0emphasized that the licensee must retain ultimate control of a station subject to such an   agreement, including a time brokerage agreement or other similar arrangement, and must adhere  Xh$-  -to the Communications Act, the Commission's rules and policies and the antitrust laws. See, e.g.,  XQ%-  Gisela Huberman, 6 FCC Rcd 5397 (MMB 1991); Brian M. Madden, 6 FCC Rcd 1871 (MMB  X:&-1991); Peter D. O'Connell, 6 FCC Rcd 1867 (MMB 1991); J. Dominic Monahan, 6 FCC Rcd ":&!%/++$"  X-  1867 (MMB 1991); Roy R. Russo, 5 FCC Rcd 7586 (MMB 1990); Joseph A. Belisle, 5 FCC Rcd  X-7585 (MMB 1990).  +4!+VFEDERAL COMMUNICATIONS COMMISSION ++VRoy J. Stewart VChief, Mass Media Bureau ++re  X -cc:rruMichael Bader, Esquire rruMr. William J. Glynn, Jr. rruPeter Gutmann, Esquire rruJeffrey D. Southmayd, Esquire +re+rerruDavid Tillotson, Esquire rru  XK-+re+