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A.  2vxtb a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` 2  x $ a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h 2;b;a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technical2 m=K a1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   2#+!!x":#a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . 2*#3x$%e)a8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8: S'  #&J\  P6Q&P#Federal Communications Commission`}(#cDA 991366 ă   yx}dddy([Federal Communications Commission HAWashington, D.C. 20554 `(#S#&J\  P6Q&P# In reply refer to: ` `  hhCqpp  *xxX1800C1KMS ` `  hhCqpp  *xxX98050360 ` `  aJuly 13, 1999  S'`(#  Released: July 14, 1999 ă  S6 'CERTIFIED MAIL RETURN RECEIPT REQUESTEDpp  *   Colorado West Broadcasting, Inc. P.O. Box 1028 Glenwood Springs, CO 81602 ` `  hhCqRe: Stations KGLN(AM) and KMTS(FM), ` `  hhCq Glenwood Springs, Colorado ` `  hhCq K244CO, West Glenwood Springs, Colorado ` `  hhCq K244DB, New Castle/Rural, Colorado ` `  hhCq K244AN, Rifle, Colorado ` `  hhCq K296BY, Carbondale/Silt, Colorado Dear Licensee: ` `  "The Chief, Mass Media Bureau, pursuant to authority delegated him under Section 0.283(c)(3) of  xZthe Commission's Rules, has before him for consideration: applications for transfer of control and for  xcrenewal of licenses of Colorado West Broadcasting, Inc. ("CWB"), licensee of the abovecaptioned  S' xprimary and translator radio stations; X C yO;' x ԍ File Nos. BR961129ZR; BRH961220YG; BRFT961220YI; BRFT961220YH; BRFT961220YJ; BRFT x 961220YK; BTC970724GP; BTCH970724GQ; BTCFT970724GR; BTCFT970724GS; BTCFT970724GT; and BTCFT970724GU.  and information concerning possible unauthorized transfers of  xcontrol of the stations contained in a pleading filed April 18, 1997, by Allen Bell, and a response thereto  xfiled by CWB. For the reasons discussed herein, this letter grants the transfer of control and license  xrenewal applications and constitutes a NOTICE OF APPARENT LIABILITY FOR A FORFEITURE  xpursuant to Section 503(b) of the Communications Act of 1934, as amended, (the "Act"), for violations  xof Section 310(d) of the Act, and Sections 73.3540 (transfer of control), 73.3615 (ownership reports) and Section 73.3526 (public file) of the Commission's Rules.  Sn' ` `  S;' " Background. By objection filed April 18, 1997,J; C yO$' x^ ԍ While styled as a "petition to deny" the abovecaptioned license renewal applications, Bell's opposition was  xb neither served upon the licensee nor supported by an affidavit, as required by Section 309(d)(1) of the Act, 47 U.S.C.  x Sec. 309(d)(1). Accordingly, it will be treated as an informal objection pursuant to 47 C.F.R. Sec. 73.3587 of the  x Commission's Rules, to the extent that it contains information concerning the licensee's conduct relevant to the public interest.J Allen Bell, shareholder and former officer,  xdirector, and station general manager of the licensee, alleges that CWB failed to seek Commission  xapproval of its transfer of control, involving two separate stock transactions that took place in October" ,**UUw!"  x1996 and March 1997. Mr. Bell further contends that the stock transfers should have been reported to  xthe FCC, and reflected in the stations' public files, but that they were not disclosed. In response, CWB  xfirst contends that six October 1996 stock transfers of 4.98% each from William R. Dunaway to six  xemployees constituted the transfer of minority interests (29.88%) that did not require prior Commission  xconsent, either individually or in the aggregate, and that were reportable, if at all, in the licensee's annual  xownership update in December 1996. CWB concedes, however, that the March 21, 1997 stock  x*transaction, involving the conveyance of a 25.01% interest from one of its shareholders, Keith Hefner, to  xDalmation Communications, Inc. ("DCI"), when combined with the prior unreported transaction,  xconstituted the transfer of an aggregated controlling interest of 54.89% to persons whose qualifications  xhad not yet been passed upon by the Commission. The licensee claims that this transfer was not  xundertaken to deceive or to conceal information from the Commission, but upon the mistaken belief that  xthe transaction did not require prior FCC consent. The licensee further submits that, after reviewing Bell's  xobjection, it demonstrated good faith by retaining communications counsel and promptly filing the  xappropriate applications, in conjunction with a full account of the circumstances surrounding the transactions in question.  "In addition, Mr. Bell, who had served as general manager of KGLN(AM) and KMTS(FM),  xcontends that he had been instructed by the stockholders not to disclose the changes of stock on the annual  xownership report due December 1, 1996, but that he had done so in spite of these instructions, and had  xZalso placed the information in the stations' public inspection files. Mr. Bell further contends that when  x@he subsequently examined the public files in April 1997, he was unable to locate the ownership report.  xyIn response, CWB denies that its principals gave instructions to Mr. Bell to conceal any relevant  xinformation from the Commission, or that they removed information from the stations' public inspection  x*files. CWB concedes, however, that it "cannot now determine what was, in fact, filed by Mr. Bell," who  x<was responsible for the preparation and filing of these materials with the Commission and for their  xinclusion in the stations' public files, and submits that, on the assumption that the ownership report was not filed December 1, 1996, it took corrective action in July 1997.  S'` `   Sl' "RDiscussion. Section 310(d) of the Act prohibits the transfer of control of a station license, and  xany rights thereunder, without prior Commission consent. There is no exact formula by which control  x7of a broadcast station can be determined. It is well settled that "control," as used in the Act and pertinent  x<Commission rules, encompasses all forms of control, actual or legal, direct or indirect, negative or  S' xaffirmative, and that the passage of de facto as well as de jure control demands the prior consent of the  Sm' xCommission. Stereo Broadcasters, Inc., 55 FCC 2d 819, 821 (1975) (citing WWIZ, Inc., 36 FCC 561,  xD2 RR 2d 169 (1964) and cases cited therein). In ascertaining whether a transfer of control has occurred,  xwe traditionally look beyond the legal title to whether a new entity or individual has obtained the right  S' xto determine the basic operating policies of the station. See WHDH, Inc., 17 FCC 2d 856 (1969), aff'd  S' x^sub nom. Greater Boston Television Corp. v. FCC, 444 F.2d 841 (D.C. Cir. @g S' ` `  Federal Communications Commission DA 991366 ____________________________________________________________________________________1970), cert. denied, 403 U.S. 923 (1971).  "We have carefully considered the record in this case, including all the materials cited and supplied  S ' xby both the objector and the licensee. We conclude that an apparent unauthorized transfer of de jure  xcontrol of the subject stations occurred in this case. Specifically, we find that the March 21, 1997,  x7consummation of the 25.01% transfer of CWB stock from Keith Hefner to DCI, considered cumulatively  xwith the prior transfer of 29.88% of the licensee's stock to those not previously passed upon by the  S $' xkCommission, resulted in an apparent unauthorized transfer of a 54.89% controlling interest in the licensee,  xin continuing violation of the Section 310(d) of the Act and Section 73.3540 of the Commission's Rules since March 21, 1997.  "RIn addition, it appears that CWB apparently violated Section 73.3615(a) and Section 73.3526(a)  xMof the Commission's Rules because it did not file its 1996 annual ownership report, or place the report" (,C)C)UU("  xin its stations' public files, until July 16, 1997. The ownership report should have been filed on or by  S' xDecember 1, 1996, the anniversary of the date that the licensee's renewal application was due. See 47 C.F.R. Secs. 73.3615(a), 73.1020(a)(10) and 73.3539(a).  S4' "We find CWB's apparent violation of Sections 73.3615 and 73.3526 to be de minimis. While the  xVlicensee's 1996 annual ownership report was submitted late, it contained information that was fully  xaccurate, and CWB represents that the stations' public files have since been reviewed and completed.  xMoreover, CWB's apparent lapse in maintaining complete public files appears to have stemmed directly  x<from its failure to file the appropriate transfer of control application and to timely submit its annual  S5' xMownership report.5 yO ' x ԍ Mr. Bell also alleged that CWB's principals directed him to withhold pertinent information from the annual  xk ownership report and from the stations' public files. The declarations provided by Messrs. Rayne and Dunaway,  yO- ' x however, flatly deny those charges. Even assuming, arguendo, that such information was excluded, it would seem  x! likely that this resulted from the same mistaken belief that caused CWB to refrain from filing the appropriate transfer  xZ of control application in the first instance, and not an intentional attempt to deceive, conceal, or misrepresent information before the Commission.  Although CWB attempts to blame Mr. Bell, its former station general manager, for  xthese lapses, that explanation is not availing, because the Commission has long held that licensees remain  S' xxultimately responsible for the acts and omissions of their employees. Gaffney Broadcasting, Inc., 23 FCC  S ' x2d 912, 913 (1970), citing Eleven Ten Broadcasting Corp., 33 FCC 706 (1962). However, we will not  ximpose an additional forfeiture amount for these apparent violations. Instead, we will direct the licensee to exercise greater care with regard to its reporting obligations in the future.  S ' "Sanction. For the reasons set forth above, we find that a forfeiture is warranted for the apparent  x/violation of Section 310(d) of the Act, and Section 73.3540 of the Commission's Rules. From the  xkinformation supplied, it appears that an unauthorized transfer of control occurred on March 21, 1997, and  xhas continued since then. Accordingly, pursuant to Section 503(b) of the Act, Colorado West  xQBroadcasting, Inc., licensee of the captioned primary and translator radio stations, is hereby advised of its  xZapparent liability for a forfeiture of Seven Thousand Five Hundred Dollars ($7,500.00) for its apparent willful, repeated violations of Section 310(d) of the Act and Section 73.3540 of the Commission's Rules.  "In assessing this monetary forfeiture, we have taken into account the nature, circumstances, extent  xpand gravity of the violations, as well as the degree of culpability and the stations' prior enforcement history. Section 503(b)(2)(D) of the Act, 47 U.S.C. Sec. 503(b)(2)(D).   Sl' "VThe nature of the unauthorized transfer of control in this case was similar to that which took place  S9' xin First Broadcasting Corp., 3 FCC Rcd 2758 (1988), where the radio station licensee was fined $20,000  xfor an unauthorized transfer of control effectuated through unreported stock transactions over a sixyear  xperiod. Unlike that case, the violation herein was based on a single unauthorized transfer of control.  S' xAccordingly, the appropriate amount would be comparable to that imposed in Salem Broadcasting, Inc.,  x6 FCC Rcd 4172, 4173 (MMB 1991), where the licensee was fined $10,000 for an unauthorized transfer of control and a main studio rule violation that continued for approximately ten months.  "Based on the documents provided, it appears that while the parties' understanding of the relevant  S' xVfacts and applicable law was incorrect,XX@ yO%' x ԍ The licensee provides a copy of correspondence indicating that the parties, unaided by counsel, sought FCC  x; staff advice on the issue of the transfer of control, but gave incomplete information. In this regard, Mr. Chenowith's  x query of the staff may have misstated the relevant factual background involved because it appears to have ignored"',{({(!'"  xD mentioning the prior unreported stock transaction with which the latter CWB stock transfer from Keith Hefner to  x DCI was required to be aggregated. As a result, the licensee erroneously concluded that no prior consent was required. they nevertheless attempted, in good faith, to comply with",{({("  xCommission requirements when DCI principal Gabe Chenowith sought staff advice concerning the latter  S' x7stock transaction. In similar mitigating instances, a reduction in forfeiture was found to be justified. See  S' xLiability of Delta Radio, Inc., 10 FCC Rcd 12538 (MMB 1995) ($7,500 forfeiture imposed for single  xinstance of unauthorized transfer of control where licensee made "good faith efforts" to comply with  S4' xCommission rules), recon. granted, DA 981676 (MMB, released August 24, 1998) (forfeiture  S' xsubsequently reduced due to prior history of rule compliance and demonstrated inability to pay); Liability  S' xof Monte Corporation, 11 FCC Rcd 20535 (MMB 1996), citing Victor Valley Broadcasting, Inc., 2 FCC  S' xQ2d 495 (1966); cf. Hualapai Broadcasters, Inc., 8 FCC Rcd 4914 (MMB 1993) (forfeiture reduced in part  xbecause licensee relied upon legal opinion of a recognized authority). Consequently, we believe that a forfeiture amount of $7,500 is appropriate in this case.  ""In regard to this forfeiture proceeding, CWB is afforded a period of thirty (30) days from the date  xof this letter "to show, in writing, why a forfeiture penalty should not be imposed or should be reduced,  xcor to pay the forfeiture. Any showing as to why the forfeiture should not be imposed or should be  xIreduced shall include a detailed factual statement and such documentation and affidavits as may be  xpertinent." 47 C.F.R. Section 1.80(f)(3). Other relevant provisions of Section 1.80 are summarized in the attachment to this letter.  "Accordingly, for the reasons set forth above, the April 18, 1997 petition to deny filed by Allen  xBell, when considered as an informal objection, IS GRANTED to the extent indicated above, and  xDENIED in all other respects. Furthermore, having found that they satisfy the standards set forth under  x47 U.S.C. Section 309 and the relevant Commission rules, consistent with the public interest, convenience  S'and necessity, the foregoing transfer of control and license renewal applications ARE GRANTED.  yO&' x ԍ Consistent with matters addressed in our further letter ruling issued this date, we shall withhold action on the  xZ transfer of control and license renewal applications for Station KMTS(FM), Glenwood Springs, Colorado and  x Translator Station K296BY, Carbondale/Silt, Colorado, until the licensee demonstrates its compliance with Section 74.1232(d) of the Commission's Rules. ` `  hhCqFEDERAL COMMUNICATIONS COMMISSION ` `  hhCqRoy J. Stewart ` `  hhCqChief, Mass Media Bureau Attachment cc: Mr. Allen Bell  S' Mr. Brian M. Madden, Esq.hhC