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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
KASA Radio Hogar, Inc. ) File No. EB-00-SD-295
)
Licensee of Station KDAP(AM) ) NAL/Acct. No. 200132940002
)
Douglas, Arizona ) FRN 0004-3246-87
MEMORANDUM OPINION AND ORDER
Adopted: March 22, 2002 Released: March 27,
2002
By the Commission:
INTRODUCTION
1. In this Memorandum Opinion and Order ("Order"), we deny
an application for review filed by KASA Radio Hogar, Inc. (``KASA
Radio''), licensee of Radio Station KDAP(AM), of the Memorandum
Opinion and Order ("MO&O")1 issued by the Enforcement Bureau in
this proceeding. Pursuant to Section 503(b) of the
Communications Act of 1934, as amended ("the Act"),2 and Section
1.80 of the Commission's Rules ("the Rules"), the Enforcement
Bureau found KASA Radio liable for a monetary forfeiture in the
amount of $15,000 for willful violation of the following sections
of the Rules: 73.54(d) (failure to provide a copy of the
station's antenna resistance and reactance measurements during an
inspection); 73.1350(c)(1) (failure to have the proper monitoring
equipment installed at the duty operator position); 73.1590(a)(6)
(failure to conduct annual equipment performance measurements);
and 73.3526(a)(2) (failure to maintain a public inspection
file).3 For the reasons stated below, we deny KASA Radio's
application for review.
BACKGROUND
2. On November 17, 2000, the FCC's San Diego, California
Field Office ("San Diego Office") conducted an inspection of
Radio Station KDAP(AM) in Douglas, Arizona, after it received
information from the Enforcement Bureau's High Frequency
Direction Finding Center that KDAP(AM)'s carrier frequency
measurement exceeded the frequency tolerance in violation of
Section 73.44(b) of the Rules. The inspection revealed 10
different rule violations, including the violation of Section
73.44(b). On December 19, 2000, the District Director of the San
Diego Office issued a Notice of Violation ("NOV") for the
violations. On January 26, 2001, KASA Radio submitted a response
to the NOV. On February 15, 2001, the District Director of the
San Diego Office issued a Notice of Apparent Liability for
Forfeiture (``NAL'')4 to KASA Radio for the rule violations
referenced in paragraph one above. On February 16, 2001, KASA
Radio submitted a supplement to its January 26, 2001 response to
the NOV.
3. After being granted an extension of time to respond to
the NAL, KASA Radio submitted its response to the NAL on April
19, 2001. In its response, KASA Radio did not dispute the
violations. Rather, it sought rescission or reduction of the
forfeiture amount because of KDAP(AM)'s financial condition. On
June 7, 2001, the Enforcement Bureau issued a Forfeiture Order5
in which it denied KASA Radio's request and imposed the full
forfeiture amount of $15,000. On July 6, 2001, KASA Radio filed
a Petition for Reconsideration ("Petition") of the Forfeiture
Order. In its Petition, KASA Radio again argued that the
forfeiture amount was beyond KDAP(AM)'s ability to pay and
requested the Enforcement Bureau to reconsider its action taken
in the Forfeiture Order. On September 4, 2001, the Enforcement
Bureau issued a MO&O in which it denied KASA Radio's Petition and
rejected its request for rescission or reduction of the
forfeiture based on KASA Radio's purported inability to pay. In
response to the MO&O, KASA Radio filed an application for review
on October 4, 2001. In its application for review, KASA Radio
still does not dispute the violations, but it argues that it had
either remedied or taken steps to remedy the violations as soon
as possible. Again, as it asserted in its Petition, KASA Radio
contends that the Commission is not required by any law or
regulation to weigh the financial information for all of a
licensee's operations in determining whether a proposed
forfeiture should be reduced because of a licensee's inability to
pay. Also, as it argued in its Petition, KASA Radio contends
that revenues at KDAP(AM), which KASA Radio characterizes as a
"non-profit organization," are insufficient to permit payment of
the forfeiture. KASA Radio further argues that even if the
Commission concludes that the Bureau properly insisted on
considering KASA Radio's financial information, the forfeiture
would still prove to be excessive given KASA Radio's financial
condition. Finally, KASA Radio also asserts that imposition of
the forfeiture could threaten a critical service to listeners in
the Douglas, Arizona area.
DISCUSSION
4. KASA Radio contends that the Commission is not required
by any law or regulation to weigh the financial information for
all of a licensee's operations in determining whether a proposed
forfeiture should be reduced because of a licensee's inability to
pay. Regardless of whether the Commission is required to look at
consolidated operations for this purpose, its policy is to do so.
In determining an appropriate forfeiture amount, Section
503(b)(2)(D) of the Act6 requires the Commission to consider a
violator's ability to pay. In this case, the violator is the
licensee. We are also guided by our established precedent in
making such determinations. The Commission has stated that
Section 503(b)(2)(D) requires us to consider a licensee's ability
to pay in determining an appropriate forfeiture amount.7
Further, the Commission has determined that, in general, a
licensee's gross revenues are the best indicator of its ability
to pay a forfeiture.8 The Commission has also concluded that it
is appropriate to take into account ``income derived from other
affiliated operations, as well as the financial status of the
station(s) in question.''9 As the Common Carrier Bureau stated
in Hinton Telephone Company of Hinton, Oklahoma:
reviewing the data for consolidated operations rather
than financial data limited to just [one station]
accurately portrays whether a licensee can pay a
proposed forfeiture. Our determination of a licensee's
ability to pay should reflect whether the licensee in
general is financially capable of paying a forfeiture,
not whether financial data from a limited portion of
its operations can sustain a forfeiture.
7 FCC Rcd 6643, 6644 (CCB 1992), review denied, 8 FCC Rcd 5176
(1993). Thus, as the Enforcement Bureau correctly pointed out,
it is the Commission's general policy to consider the financial
condition of a licensee's consolidated operations, not just the
financial condition of an individual station or a limited portion
of its operations. For the reasons quoted above, this policy
makes good sense, and we follow it here.
5. KASA Radio also contends that Hinton is inapposite
precedent because it involved a telephone company, not a
broadcast station, and because the public interest aspects of the
cases are different. We reject KASA Radio's argument. We think
that Emery Telephone and Hinton supply applicable precedent. The
Commission has stated that the guidelines for base forfeiture
amounts will not reflect distinctions based on the traditional
classification of broadcast, common carrier, and other
services.10 We see no basis for subjecting inability to pay
claims filed by broadcast licensees to a different standard than
that applied to common carriers. Thus, consistent with Emery
Telephone and Hinton, we will analyze the financial condition of
KASA Radio, not that of KDAP(AM), to determine whether KASA Radio
can pay the forfeiture imposed.
6. KASA Radio next points to the case of Hill Country
Radio, Inc.11 to support its contention. Relying on this case,
it argues that the financial information of an entire enterprise
is generally evaluated only where violations are common to
multiple sections of the enterprise or to the enterprise as a
whole. We agree with the Enforcement Bureau that KASA Radio's
reliance on Hill Country Radio, Inc. is misplaced. In Hill
Country Radio, Inc., the Mass Media Bureau issued four separate
NALs to Hill Country Radio for engaging in unauthorized transfers
of control of the four radio stations licensed to it. As was the
case here, in assessing the inability to pay claim, the Mass
Media Bureau evaluated the licensee's financial condition and not
that of each individual station. Indeed, that case does not even
address the issue KASA Radio raises here - whether an inability
to pay claim should be evaluated based on the condition of an
individual station or the company when only one station is
involved in the violation.
7. Alternatively, KASA Radio argues that even if the
Commission concludes that the Bureau properly insisted on
considering the licensee's financial information, rather than
that of the station, the forfeiture would still prove to be
excessive because of the financial condition of KASA Radio.
KASA Radio, however, has never provided any information
concerning its revenues or income as a whole.12 Therefore, we
have no justification for reducing the forfeiture based upon KASA
Radio's claim of inability to pay. Further, even though KASA
Radio states that imposition of this forfeiture may threaten its
ability to serve the Douglas, Arizona area, we have held that,
consistent with our holding in PJB Communications, we will not
find that a forfeiture will threaten a licensee's ability to
serve the public unless a comparison of the forfeiture amount
with the licensee's gross receipts shows that such a threat
exists.13 Again, in this case, we can not make such a comparison
because KASA Radio has not provided us with its financial
documentation.
8. Finally, KASA Radio asserts that because it
expeditiously remedied or took steps to remedy the violations at
KDAP(AM), the forfeiture should have been rescinded or reduced.
Corrective action taken to come into compliance with Commission
rules or policy is expected, and does not nullify or mitigate any
prior forfeitures or violations.14
9. Accordingly, IT IS ORDERED THAT, pursuant to Section
1.115(g) of the Rules,15 KASA Radio Hogar's application for
review of the Enforcement Bureau's Memorandum Opinion and Order
for NAL No. 200132940002 IS hereby DENIED.
10. IT IS FURTHER ORDERED that, pursuant to Section 503(b)
of the Act16 and Section 1.80 of the Rules,17 KASA Radio Hogar,
Inc. shall pay the amount of fifteen thousand dollars ($15,000)
for the above-stated violations within 30 days of the release
date of this Order. Payment may be made by check or money order,
drawn on a U.S. financial institution, payable to the Federal
Communications Commission. The remittance should be marked
``NAL/Acct. No. 200132940002, FRN 0004-3246-87'' and mailed to
the Federal Communications Commission, P.O. Box 73482, Chicago,
Illinois 60673-7482. If the forfeiture is not paid within the
period specified, the case may be referred to the Department of
Justice for collection pursuant to Section 504(a) of the Act.18
Requests for full payment under an installment plan should be
sent to: Chief, Revenue and Receivables Group, 445 Twelfth
Street, S.W., Washington, D.C. 20554.19
11. IT IS FURTHER ORDERED that, a copy of this Order shall
be sent by Certified Mail Return Receipt Requested to Paul Brown,
Esq., counsel for KASA Radio Hogar, Inc., at Wood, Maines &
Brown, 1827 Jefferson Place, NW, Washington, DC 20036.
FEDERAL COMMUNICATIONS COMMISSION
William F. Caton
Acting Secretary
_________________________
1 KASA Radio Hogar, Inc., 16 FCC Rcd 16160 (Enf. Bur. 2001).
2 47 U.S.C. ' 503(b).
3 47 C.F.R. §§ 73.54(d), 73.1350(c)(1), 73.1590(a)(6),
73.3526(a)(2).
4 Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200132940002 (Enf. Bur., San Diego Office, released February 15,
2001).
5 KASA Radio Hogar, Inc., 16 FCC Rcd 11934 (Enf. Bur. 2001).
6 47 U.S.C. § 503(b)(2)(D).
7 See Emery Telephone, 15 FCC Rcd 7181, 7185 (1999).
8 PJB Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089
(1992).
9 Emery Telephone, 13 FCC Rcd 23854, 23859-60 (1998)
(emphasis added), recon. denied, 15 FCC Rcd 7181 (1999).
10 See The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, 12 FCC Rcd 17087, at 17097-17098 (1997),
recon. denied, 13 FCC Rcd 303 (1999).
11 14 FCC Rcd 17708 (MMB 1999).
12 KASA Radio stated in its application for review that it
would provide supplemental information concerning the income of
KASA Radio as a whole. However, it has never provided this
information.
13 Id. at 7185.
14 See Seawest Yacht Brokers DBA San Juan Marina Friday
Harbor, Washington, 9 FCC Rcd 6099 (1994).
15 47 C.F.R. ' 1.115(g).
16 47 U.S.C. § 503(b).
17 47 C.F.R. § 1.80.
18 47 U.S.C. ' 504(a).
19 47 C.F.R. ' 1.1914.