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1. Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
)
NEW NORTHWEST BROADCASTERS, ) File No. EB-02-IH-0696
L.L.C. ) NAL/Acct. No. 200432080161
) FRN # 0003799814
Licensee of Stations KEGX(FM), ) Facility ID Nos. 53140,
KIOK(FM), KALE(AM), Richland, ) 12455, 63359, 35717, 53139
Washington, KNLT(FM), Walla )
Walla, Washington, and
KTCR(AM), Kennewick,
Washington1
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: May 24, 2004 Released: May 25,
2004
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Notice of Apparent Liability for
Forfeiture (``NAL''), we find New Northwest Broadcasters,
L.L.C. (``NNB''), licensee of Stations KEGX(FM) KIOK(FM),
KALE(AM), Richland, Washington, KNLT(FM), Walla Walla,
Washington, and KTCR(AM), Kennewick, Washington, apparently
liable for a monetary forfeiture in the amount of Four
Thousand Dollars ($4,000) for a violation of section 73.1216
of the Commission's rules.2 That rule requires a broadcast
licensee to conduct its contests substantially as announced
or advertised. We find that NNB broadcast contests in which
it awarded prizes to callers who did not satisfy its pre-
announced contest rule parameters.
II. BACKGROUND
2. The Commission received a confidential complaint
dated July 31, 2002, alleging that NNB, time-broker of
Station KUJ-FM, Walla Walla, Washington, had engaged in
``rampant rigging of contests'' there.3 According to the
complaint, the station's on-air announcers were instructed
by NNB's managers to award contest prizes ``to women that
sound[ed] over the age of 18,'' even where the announced
contest rules specified that the ninety-ninth caller would
win the applicable prize.4
3. On November 15, 2002, the Investigations and
Hearings Division of the Enforcement Bureau sent a letter of
inquiry to NNB.5 NNB responded by letter dated December 23,
2002.6 In its response, NNB denied that its stations and
its employees, including NNB's Operations Manager, and an
announcer, violated the applicable statutory and regulatory
requirements.7
III. DISCUSSION
4. Applicable Statutory and Regulatory Requirements.
Section 508 of the Act prohibits a licensee from knowingly
deceiving the public by engaging ``in any artifice or scheme
for the purpose of prearranging or predetermining in whole
or in part the outcome of a purportedly bona fide contest .
. . of chance.''8 Thus, section 73.1216 of the Commission's
rules requires a broadcast licensee to conduct station-
sponsored contests ``substantially as announced or
advertised,'' and to disclose fully and accurately the
``material terms'' of such contests.9 Material terms, among
other things, include any eligibility restrictions, means of
selection of winners, and instructions regarding entry and
participation.10
5. With respect to the contest-rigging allegation,
NNB has represented that its stations, except for KALE(AM)
and KTCR(AM), have conducted various station-sponsored grand
and minor prize contests, typified by call-in parameters
(i.e., contests awarded to designated numbered callers).11
As an example, NNB provided a transcript of a typical
contest announcement.12 NNB contends that the parameters of
and the procedures for such station-sponsored contests were
established and implemented by its stations' program
directors and disc jockeys.13 NNB maintains that its
employees did not rig contest results, and that its stations
conducted contests and awarded prizes consistent with the
announcements and in accordance with the applicable
statutory and regulatory requirements.14 NNB acknowledged,
however, that, in its investigation into the allegations, it
discovered that, in a few incidents in which call volume
fell short of the announced designated numbered callers,
prizes had been awarded to the next eligible callers.15 NNB
maintained that these incidents were isolated and were
attributable to insufficient call volume -- not from any
desire to favor any type of contestant, adult female or
otherwise.16 NNB advised that it took corrective action, by
informing its disc jockeys that, in the event of
insufficient call volume, they should announce a lower
number level and award the prize accordingly.17
6. In this case, it appears that NNB violated section
73.1216 of the Commission's rules by not conducting at least
one of its contests substantially as announced. NNB admits
that its station announcers, in a few instances, awarded
prizes to call-in contestants who did not meet the contests'
announced parameters and requirements. Licensees, as public
trustees, have the affirmative obligation to prevent the
broadcast of false, misleading or deceptive contest
announcements,18 and for conducting their contests
substantially as announced.19 Although NNB later took
remedial actions to correct the conduct of its contests
prospectively, these actions do not absolve it from
liability and the proposed forfeiture penalty.20
V. FORFEITURE
7. Under section 503(b)(1) of the Act, any person who
is determined by the Commission to have willfully or
repeatedly failed to comply with any provision of the Act or
any rule, regulation, or order issued by the Commission
shall be liable to the United States for a monetary
forfeiture penalty.21 In order to impose such a forfeiture
penalty, the Commission must issue a notice of apparent
liability, the notice must be received, and the person
against whom the notice has been issued must have an
opportunity to show, in writing, why no such forfeiture
penalty should be imposed.22 The Commission will then issue
a forfeiture if it finds by a preponderance of the evidence
that the person has violated the Act or a Commission rule.23
As we set forth in greater detail below, we conclude under
this standard that NNB is apparently liable for a forfeiture
for its apparent willful violation of section 73.1216 of the
Commission's rules.
8. Based upon the evidence before us, we find that
NNB apparently willfully24 violated section 73.1216 of the
Commission's rules. The Commission's Forfeiture Policy
Statement sets a base forfeiture amount of $4,000 for
failure to conduct a station contest substantially as
announced.25 In assessing the monetary forfeiture amount, we
must take into account the statutory factors set forth in
Section 503(b)(2)(D) of the Act,26 which include the nature,
circumstances, extent, and gravity of the violation, and
with respect to the violator, the degree of culpability, any
history of prior offenses, ability to pay, and other such
matters as justice may require. After considering the
record, the factors contained in section 503(b)(2)(D) of the
Act, 47 U.S.C. § 503(b)(2)(D), and the Forfeiture Policy
Statement, we believe that a $4,000 forfeiture is
appropriate in this case.
V. ORDERING CLAUSES
9. ACCORDINGLY, IT IS ORDERED, pursuant to section
503(b) of the Communications Act of 1934, as amended,27 and
sections 0.111, 0.311, and 1.80 of the Commission's rules,28
that New Northwest Broadcasters, L.L.C. is hereby NOTIFIED
of its APPARENT LIABILITY FOR FORFEITURE in the amount of
Four Thousand Dollars ($4,000) for willfully violating
section 73.1216 of the Commission's rules.
10. IT IS FURTHER ORDERED, pursuant to section 1.80
of the Commission's rules, that within thirty (30) days of
the release of this Notice, New Northwest Broadcasters,
L.L.C. SHALL PAY the full amount of the proposed forfeiture
or SHALL FILE a written statement seeking reduction or
cancellation of the proposed forfeiture.
11. Payment of the forfeiture may be made by mailing a
check or similar instrument, payable to the order of the
Federal Communications Commission, to the Forfeiture
Collection Section, Finance Branch, Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482.
The payment MUST INCLUDE the FCC Registration Number (FRN)
referenced above and also should note the NAL/Acct. No.
referenced above.
12. The response, if any, must be mailed to William
Davenport, Chief, Investigations and Hearings Division,
Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W, Room 3-B433, Washington, D.C. 20554 and
MUST INCLUDE the NAL/Acct. No. referenced above.
13. The Commission will not consider reducing or
canceling a forfeiture in response to a claim of inability
to pay unless the respondent submits: (1) federal tax
returns for the most recent three-year period; (2) financial
statements prepared according to generally accepted
accounting practices (``GAAP''); or (3) some other reliable
and objective documentation that accurately reflects the
respondent's current financial status. Any claim of
inability to pay must specifically identify the basis for
the claim by reference to the financial documentation
submitted.
14. Requests for payment of the full amount of this
Notice of Apparent Liability under an installment plan
should be sent to: Chief, Revenue and Receivables Operations
Group, 445 12th Street, S.W., Washington, D.C. 20554.29
15. Under the Small Business Paperwork Relief Act of
2002, Pub L. No. 107-198, 116 Stat. 729 (June 28, 2002), the
FCC is engaged in a two-year tracking process regarding the
size of entities involved in forfeitures. If NNB qualifies
as a small entity and if it wishes to be treated as a small
entity for tracking purposes, it should so certify to us
within thirty (30) days of this NAL, either in its response
to the NAL or in a separate filing to be sent to the
Investigations and Hearings Division. NNB's certification
should indicate whether it, including its parent entity and
its subsidiaries, meet one of the definitions set forth in
the list provided by the FCC's Office of Communications
Business Opportunities (OCBO) set forth in Attachment A of
this Notice of Apparent Liability. This information will be
used for tracking purposes only. NNB's response or failure
to respond to this question will have no effect on its
rights and responsibilities pursuant to Section 503(b) of
the Communications Act. If NNB has questions regarding any
of the information contained in Attachment A, please contact
OCBO at (202) 418-0990.
16. IT IS FURTHER ORDERED that a copy of this Notice
shall be sent, by Certified Mail/Return Receipt Requested,
to New Northwest Broadcasters, L.L.C., 15405 S.E. 37th
Street, Suite 130, Bellevue, Washington 98006, and to its
counsel, M. Anne Swanson, Esq., Dow Lohnes & Albertson, 1200
New Hampshire Avenue, N.W., Suite 800, Washington, D.C.
20036-6802.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
October 2002
ATTACHMENT A
FCC List of Small Entities
As described below, a ``small entity'' may be a small
organization,
a small governmental jurisdiction, or a small business.
(1) Small Organization
Any not-for-profit enterprise that is independently owned
and operated and
is not dominant in its field.
(2) Small Governmental Jurisdiction
Governments of cities, counties, towns, townships, villages,
school districts, or
special districts, with a population of less than fifty
thousand.
(3) Small Business
Any business concern that is independently owned and
operated and
is not dominant in its field, and meets the pertinent size
criterion described below.
Industry Type Description of Small Business
Size Standards
Cable Services or Systems
Special Size Standard -
Cable Systems Small Cable Company has 400,000
Subscribers Nationwide or Fewer
Cable and Other Program
Distribution $12.5 Million in Annual
Receipts or Less
Open Video Systems
Common Carrier Services and Related Entities
Wireline Carriers and
Service providers
1,500 Employees or Fewer
Local Exchange Carriers,
Competitive Access
Providers, Interexchange
Carriers, Operator Service
Providers, Payphone
Providers, and Resellers
Note: With the exception of Cable Systems, all size
standards are expressed in either millions of dollars or
number of employees and are generally the average annual
receipts or the average employment of a firm. Directions
for calculating average annual receipts and average
employment of a firm can be found in
13 CFR 121.104 and 13 CFR 121.106, respectively.
International Services
International Broadcast
Stations
$12.5 Million in Annual
Receipts or Less
International Public Fixed
Radio (Public and Control
Stations)
Fixed Satellite
Transmit/Receive Earth
Stations
Fixed Satellite Very Small
Aperture Terminal Systems
Mobile Satellite Earth
Stations
Radio Determination
Satellite Earth Stations
Geostationary Space Stations
Non-Geostationary Space
Stations
Direct Broadcast Satellites
Home Satellite Dish Service
Mass Media Services
Television Services
$12 Million in Annual Receipts
or Less
Low Power Television
Services and Television
Translator Stations
TV Auxiliary, Special
Broadcast and Other Program
Distribution Services
Radio Services
$6 Million in Annual Receipts
or Less
Radio Auxiliary, Special
Broadcast and Other Program
Distribution Services
Multipoint Distribution Auction Special Size Standard -
Service Small Business is less than
$40M in annual gross revenues
for three preceding years
Wireless and Commercial Mobile Services
Cellular Licensees
1,500 Employees or Fewer
220 MHz Radio Service -
Phase I Licensees
220 MHz Radio Service - Auction special size standard -
Phase II Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
controlling principals)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
controlling principals)
700 MHZ Guard Band Licensees
Private and Common Carrier
Paging
Broadband Personal
Communications Services 1,500 Employees or Fewer
(Blocks A, B, D, and E)
Broadband Personal Auction special size standard -
Communications Services Small Business is $40M or less
(Block C) in annual gross revenues for
three previous calendar years
Very Small Business is average
gross revenues of $15M or less
for the preceding three
calendar years (includes
affiliates and persons or
entities that hold interest in
such entity and their
affiliates)
Broadband Personal
Communications Services
(Block F)
Narrowband Personal
Communications Services
Rural Radiotelephone Service 1,500 Employees or Fewer
Air-Ground Radiotelephone
Service
800 MHz Specialized Mobile Auction special size standard -
Radio Small Business is $15M or less
average annual gross revenues
for three preceding calendar
years
900 MHz Specialized Mobile
Radio
Private Land Mobile Radio 1,500 Employees or Fewer
Amateur Radio Service N/A
Aviation and Marine Radio
Service 1,500 Employees or Fewer
Fixed Microwave Services
Small Business is 1,500
Public Safety Radio Services employees or less
Small Government Entities has
population of less than 50,000
persons
Wireless Telephony and
Paging and Messaging 1,500 Employees or Fewer
Personal Radio Services N/A
Offshore Radiotelephone 1,500 Employees or Fewer
Service
Wireless Communications Small Business is $40M or less
Services average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
39 GHz Service
Auction special size standard
(1996) -
Multipoint Distribution Small Business is $40M or less
Service average annual gross revenues
for three preceding calendar
years
Prior to Auction -
Small Business has annual
revenue of $12.5M or less
Multichannel Multipoint
Distribution Service $12.5 Million in Annual
Receipts or Less
Instructional Television
Fixed Service
Auction special size standard
(1998) -
Local Multipoint Small Business is $40M or less
Distribution Service average annual gross revenues
for three preceding years
Very Small Business is average
gross revenues of $15M or less
for the preceding three years
First Auction special size
standard (1994) -
Small Business is an entity
that, together with its
affiliates, has no more than a
218-219 MHZ Service $6M net worth and, after
federal income taxes (excluding
carryover losses) has no more
than $2M in annual profits each
year for the previous two years
New Standard -
Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Satellite Master Antenna
Television Systems $12.5 Million in Annual
Receipts or Less
24 GHz - Incumbent Licensees 1,500 Employees or Fewer
24 GHz - Future Licensees Small Business is average gross
revenues of $15M or less for
the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Very Small Business is average
gross revenues of $3M or less
for the preceding three years
(includes affiliates and
persons or entities that hold
interest in such entity and
their affiliates)
Miscellaneous
On-Line Information Services $18 Million in Annual Receipts
or Less
Radio and Television
Broadcasting and Wireless
Communications Equipment 750 Employees or Fewer
Manufacturers
Audio and Video Equipment
Manufacturers
Telephone Apparatus
Manufacturers (Except 1,000 Employees or Fewer
Cellular)
Medical Implant Device 500 Employees or Fewer
Manufacturers
Hospitals $29 Million in Annual Receipts
or Less
Nursing Homes $11.5 Million in Annual
Receipts or Less
Hotels and Motels $6 Million in Annual Receipts
or Less
Tower Owners (See Lessee's Type of Business)
_________________________
1 New Northwest Broadcasters, L.L.C. also time-brokers
Station KUJ-FM, Walla Walla, Washington. Station KUJ-FM is
licensed to Alexandria Communications.
2 47 C.F.R. § 73.1216.
3 See Confidential Complaint dated July 31, 2002 at 2
(``Complaint'').
4 Id.
5 See Letter from Charles W. Kelley, Chief, Investigations
and Hearings Division, Enforcement Bureau, Federal
Communications Commission to NNB, dated November 15, 2002
(``LOI'').
6 See Letter from Trila Bumstead, Chief Financial Officer,
NNB, to Charles W. Kelley, Chief, Investigations and
Hearings Division, Enforcement Bureau, dated December 23,
2002 (``Response'').
7 Id.
8 47 U.S.C. § 509.
9 47 C.F.R. § 73.1216 specifically provides that a licensee
that broadcasts or advertises information about a contest it
conducts shall fully and accurately disclose the material
terms of the contest, and shall conduct the contest
substantially as announced or advertised. No contest
description shall be false, misleading or deceptive with
respect to any material term.
10 See 47 C.F.R. § 73.1216, notes 1(b) and 2. Note 1 to
that rule provides that the material terms of the contest
include ``the extent, nature and value of prizes'' and
``the basis for valuation of the prizes.'' Note 2 to the
rule states:
In general, the time and manner of disclosure of
the material terms of a contest are within the
licensee's discretion. However, the obligation to
disclose the material terms arises at the time the
audience is first told how to enter or participate
and continues thereafter. The material terms
should be disclosed periodically by announcements
broadcast on the station conducting the contest,
but need not be enumerated each time an
announcement is sufficient. In addition to the
required broadcast announcements, disclosure of
material terms may be made in a non-broadcast
manner.
11 See Response at 4.
12 Id. at Exhibit E.
13 Id. at 6.
14 Id. at 7.
15 Id.
16 Id.
17 Id.
18 WMJX, Inc., 48 RR 2d 1339, 1355 (1981); Report and Order,
Rules Relating to Licensee-Conducted Contests, 60 FCC 2d
1072 (1976).
19 In re Headliner Radio, Inc. (KSXY-FM), 8 FCC Rcd 2962
(MMB 1993); In re Lincoln Dellar, 8 FCC Rcd 2582, 2585 (MMB-
ASD 1993) (where the cancellation of a pre-announced contest
violated the pertinent Commission rule because the contest
was not then conducted ``substantially as announced'').
20 See AT&T Wireless Services, Inc., 17 FCC Rcd 21866, 21871
(2002); see also Station KVGL, Inc., 42 FCC 2d 258, 259
(1973).
21 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); see
also 47 U.S.C. § 503(b)(1)(D) (forfeitures for violation of
14 U.S.C. § 1464). Section 312(f)(1) of the Act defines
willful as ``the conscious and deliberate commission or
omission of [any] act, irrespective of any intent to
violate'' the law. 47 U.S.C. § 312(f)(1). The legislative
history to section 312(f)(1) of the Act clarifies that this
definition of willful applies to both sections 312 and
503(b) of the Act, H.R. Rep. No. 97-765, 97th Cong. 2d Sess.
51 (1982), and the Commission has so interpreted the term in
the section 503(b) context. See, e.g., Application for
Review of Southern California Broadcasting Co., Memorandum
Opinion and Order, 6 FCC Rcd 4387, 4388 (1991) (``Southern
California Broadcasting Co.''). The Commission may also
assess a forfeiture for violations that are merely repeated,
and not willful. See, e.g., Callais Cablevision, Inc.,
Grand Isle, Louisiana, Notice of Apparent Liability for
Monetary Forfeiture, 16 FCC Rcd 1359 (2001) (issuing a
Notice of Apparent Liability for, inter alia, a cable
television operator's repeated signal leakage).
``Repeated'' merely means that the act was committed or
omitted more than once, or lasts more than one day.
Southern California Broadcasting Co., 6 FCC Rcd at 4388, ¶
5; Callais Cablevision, Inc., 16 FCC Rcd at 1362, ¶ 9.
22 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).
23 See, e.g., SBC Communications, Inc., Apparent Liability
for Forfeiture, Forfeiture Order, 17 FCC Rcd 7589, 7591, ¶ 4
(2002) (forfeiture paid).
24 Section 312(f)(1) of the Act, 47 U.S.C. § 312(f)(1),
which applies to Section 503(b) of the Act, provides that
``[t]he term `willful', when used with reference to the
commission or omission of any act, means the conscious and
deliberate commission or omission of such act, irrespective
of any intent to violate any provision of this Act ....''
See Southern California Broadcasting Co., 6 FCC Rcd 4387
(1991).
25 The Commission's Forfeiture Policy Statement and
Amendment of Section 1.80 of the Rules to Incorporate the
Forfeiture Guidelines, 12 FCC Rcd 17087, 17113 (1997),
recon. denied 15 FCC Rcd 303 (1999) (``Forfeiture Policy
Statement''); 47 C.F.R. § 1.80(b).
26 47 U.S.C. § 503(b)(2)(D).
27 47 U.S.C. § 503(b).
28 47 C.F.R. §§ 0.111, 0.311 and 1.80.
29 See 47 C.F.R. § 1.1914.