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                           Before the
                Federal Communications Commission
                     Washington, D.C. 20554

In the Matter of                        )         File  No.:  EB-
                              )         NAL/Acct.             No. 
SM Radio, Inc.                          )                        
FRN 0010-0455-32
Licensee of KUOL(AM)               )
San Marcos, Texas                  )


Adopted:  December 22, 2004             Released:   December  28, 

By the Chief, Enforcement Bureau:


     1.   In this Memorandum Opinion and Order (``Order''), we 
          grant in part and deny in part the petition for 
          reconsideration filed by SM Radio, Inc. (``SM 
          Radio''), licensee of Station KUOL(AM), San Marcos, 
          Texas.  SM Radio seeks reconsideration of the 
          Forfeiture Order1 in which the Chief, Enforcement 
          Bureau (``Bureau''), found it liable for a monetary 
          forfeiture in the amount of $7,000 for willful 
          violation of Section 73.1125 of the Commission's Rules 
          (``Rules'').2  The noted violation involves SM Radio's 
          failure to maintain a main studio presence within its 
          community of license.  


     2.   On October 28, 2003, an agent from the Commission's 
          Dallas, Texas Office (``Dallas Office'') attempted to 
          inspect the main studio of Station KUOL.  A building 
          located at the station's tower site appeared to be the 
          station's studio; however, the building was locked, 
          unattended, and appeared to be abandoned.  Also on 
          October 28, 2003, the agent spoke with SM Radio's 
          technical representative who advised the agent that 
          the building at the tower site was KUOL's main studio.  
          SM Radio's technical representative also informed the 
          agent that the only personnel staffing the studio was 
          an unpaid volunteer from a local church who was 
          available to travel to the studio if requested. 

3.   On December 19, 2003, the Dallas Office issued a Notice of 
Apparent Liability for Forfeiture  (``NAL'') to SM Radio in the 
amount of seven thousand dollars ($7,000) for the apparent main 
studio violation.3  On April 5, 2004, believing that SM Radio had 
not filed a response to the NAL, the Bureau issued a Forfeiture 
Order to SM Radio upholding the NAL.  On May 5, 2004, SM Radio, 
by its attorney, filed a petition for reconsideration 
(``petition'') of the Forfeiture Order, which it supplemented on 
June 17, 2004.4  In its petition, SM Radio does not contest the 
violations; however, it seeks reconsideration of the Forfeiture 
Order, citing its inability to pay and its history of compliance 
with the Commission's Rules.  In support of its request for 
reconsideration, SM Radio submits financial documentation for the 
year ended June 30, 2003.  SM Radio also cites to two cases in 
which reductions were granted based upon the licensee's inability 
to pay the forfeiture:  Kenneth Paul Harris, 15 FCC Rcd 23991 
(Enf. Bur. 2000) (forfeiture reduced from 18% to 4.5% of gross 
receipts) and Hill Country Radio, Inc., 14 FCC Rcd 17708 (MMB 
1999) (forfeiture of approximately 12% reduced to approximately 
4.5% of gross revenues).  We do not reach the cases cited by SM 
Radio in support of its request for reconsideration because of 
the reasons discussed below.


     4.   The forfeiture amount in this case was assessed in 
       accordance with Section 503(b) of the Communications Act 
       of 1934 as amended (``Act''), 5 Section 1.80 of the 
       Rules,6 and The Commission's Forfeiture Policy Statement 
       and Amendment of Section 1.80 of the Rules to Incorporate 
       the Forfeiture Guidelines.7  In examining SM Radio's 
       petition, Section 503(b) of the Act requires that the 
       Commission take into account 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 any other such 
       matters as justice may require.8  

     5.   The Commission has determined that, in general, a 
licensee's gross revenues are the best indicator of its ability 
to pay a forfeiture.9  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.''10  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, 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.  

     6.   In support of its request for reconsideration, SM Radio 
has submitted only its own financial documentation.  However, we 
note that there are several affiliated licensee entities whose 
gross revenues are also relevant to the issue of whether SM Radio 
can pay the proposed forfeiture because the entities share common 
ownership with SM Radio.  Paulino Bernal is the 100% owner of SM 
Radio, Inc., Paulino Bernal Evangelism (``PBE''), La Radio 
Cristiana Network, Inc. (``LRCN''), and Consolidated Radio, Inc. 
(``CRI'').  Paulino Bernal is also the individual licensee of AM 
broadcast Stations KCLR, Ralls, Texas, and KUBR, San Juan, Texas, 
as well as FM broadcast Stations KJAV, Alamo, Texas; KMFM, 
Premont, Texas; and KPBM, McCamey, Texas.  Consistent with 
Commission policy, we will not make a determination that SM Radio 
can not pay the proposed forfeiture without first considering the 
gross revenues of the entities affiliated with SM Radio.  Because 
SM Radio has not provided any information concerning the revenues 
of the several entities affiliated with it, we have no 
justification for reducing the forfeiture based upon SM Radio's 
claim of inability to pay the forfeiture.  Although SM Radio 
claims that imposition of the forfeiture would limit its ability 
to generate programming in the public interest, the Commission 
has held that, consistent with its holding in PJB Communications, 
it 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.11  In this case, we can not make such a comparison 
because the inquiry would also require the inclusion of the gross 
receipts of affiliated entities, which have not been provided.  
However, having found that SM Radio does have a history of 
compliance with the Commission's Rules, we believe a reduction of 
the forfeiture to $5,600 is warranted.   


     7.   Accordingly, IT IS ORDERED that, pursuant to Section 
405 of the Act12 and Section 1.106 of the Rules,13 SM Radio's 
petition for reconsideration of the April 5, 2004 Forfeiture 
Order IS hereby GRANTED IN PART to the extent discussed above and 
DENIED in all other respects.

     8.Payment of the forfeiture shall be made in the manner 
provided for in Section 1.80 of the Rules within 30 days of the 
release of this Order.  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.14  
Payment of the forfeiture must be made by check or similar 
instrument, payable to the order of the ``Federal Communications 
Commission.''  The payment must include the NAL/Acct. No. and FRN 
No. referenced above.  Payment by check or money order may be 
mailed to Forfeiture Collection Section, Finance Branch, Federal 
Communications Commission, P.O. Box 73482, Chicago, Illinois 
60673-7482.  Payment by overnight mail may be sent to Bank One/LB 
73482, 525 West Monroe, 8th Floor Mailroom, Chicago, IL 60661.  
Payment by wire transfer may be made to ABA Number 071000013, 
receiving bank ``Bank One,'' and account number 1165259.  
Requests for full payment under an installment plan should be 
sent to: Chief, Revenue and Receivables Operations Group, 445 
12th Street, S.W., Washington, D.C. 20554.15

     9.        IT IS FURTHER ORDERED THAT this Order shall be 
sent by regular mail and by certified mail, return receipt 
requested, to SM Radio, Inc., P.O. Box 252, McAllen, Texas 78502, 
and to its counsel, Barry D. Wood, Esq., 1827 Jefferson Place, 
NW, Washington, DC  20036.

                         FEDERAL COMMUNICATIONS COMMISSION       

                         David H. Solomon
                         Chief, Enforcement Bureau

1  19 FCC Rcd 6155 (Enf. Bur. 2004).

2 47 C.F.R.  73.1125.

3 Notice of Apparent Liability for Forfeiture, NAL/Acct. No. 
200232500002 (Enf. Bur., Dallas Office, December 19, 2003).  An 
erratum was released on January 9, 2004, which corrected the NAL 
to indicate that the NAL/Acct. No. is 200432500002.

4 In its petition, SM Radio points out that it had, indeed, filed 
a timely response to the NAL  and provided a stamped copy of  the 

5 47 U.S.C.  503(b).

6 47 C.F.R.  1.80.

7 12 FCC Rcd. 17087 (1997), recon. denied, 15 FCC Rcd. 303 

8 47 U.S.C.  503(b)(2)(D).

9 PJB Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089 

10 Emery Telephone, 13 FCC Rcd 23854, 23859-60 (1998) (emphasis 
added), recon. denied, 15 FCC Rcd 7181 (1999).

11  KASA Radio Hogar, 17 FCC Rcd 6256, 6259 (2002); Emery 
Telephone at 7185. 

12 47 U.S.C.  405.

13 47 C.F.R.  1.106.

14 47 U.S.C.  504(a).

15 See 47 C.F.R.  1.1914.