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Federal Communications Commission
Washington, D.C. 20554
In the Matter of ) File No.: EB-
) NAL/Acct. No.
Pilgrim Communications, Inc. )
Licensee, KWYD(AM) )
Colorado Springs, Colorado )
MEMORANDUM OPINION AND ORDER
Adopted: August 26, 2005 Released: September
By the Acting Chief, Enforcement Bureau:
1. In this Memorandum Opinion and Order (``Order''), we
deny the petition for reconsideration (``petition'')
filed by Pilgrim Communications, Inc. (``Pilgrim''),
licensee of Station KWYD(AM), Colorado Springs,
Colorado.1 Pilgrim seeks reconsideration of the
Forfeiture Order2 in which the Chief, Enforcement
Bureau (``Bureau''), found it liable for a monetary
forfeiture in the amount of $19,000 for willful and
repeated violation of Sections 11.35, 73.1125(a),
73.1560(a) and 73.1745(a) of the Commission's Rules
2. On November 20, 2002, the Commission's Denver,
Colorado Field Office (``Denver Office'') issued a
Notice of Apparent Liability for Forfeiture (``NAL'')4
in the amount of $19,000 to Pilgrim. The NAL was
based on findings by the Denver Office that: between
March 2001 and August 22, 2001, Pilgrim did not have
fully operational Emergency Alert System (``EAS'')
equipment at Station KWYD; on August 21, 2001 Pilgrim
did not reduce Station KWYD's power to the authorized
nighttime power level and it did not increase KWYD's
power to the authorized daytime power level on August
22, 2001; and Pilgrim did not have a full-time
management and staff presence during normal business
hours at KWYD's main studio from July 15 to August 22,
3. Pilgrim responded to the NAL on January 21, 2003 and
supplemented its response on February 20, 2003. On
May 19, 2004, the Bureau issued the subject Forfeiture
Order in which it upheld the NAL. On June 18, 2004,
Pilgrim filed a petition for reconsideration of the
Forfeiture Order. In its petition, Pilgrim does not
challenge the findings of violations against KWYD in
the Forfeiture Order. However, Pilgrim does challenge
and requests reconsideration of the Bureau's finding
that neither cancellation nor reduction of the
forfeiture is warranted. In support of its request,
Pilgrim notes PJB Communications of Virginia, Inc.,5
and cites to language therein stating that ``in some
cases, other financial indicators such as net losses,
may be relevant.6 Pilgrim notes that the financial
data it submitted demonstrated that KWYD had lost
money each year, except for 2000, when it was
marginally profitable. Pilgrim also cites Renaissance
Radio, Inc.,7 in further support of its request for
cancellation or reduction of the forfeiture.
4. The forfeiture amount in this case was assessed in
accordance with Section 503(b) of the Communications
Act of 1934 as amended (``Act''), 8 Section 1.80 of
the Rules,9 and The Commission's Forfeiture Policy
Statement and Amendment of Section 1.80 of the Rules
to Incorporate the Forfeiture Guidelines.10 In
examining Pilgrim'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
5.The general rule of PJB is that a licensee's gross
revenues are the best indicator of its ability to pay a
forfeiture.12 The Bureau followed that rule in the Forfeiture
Order when it averaged Pilgrim's gross revenues over a three-
year period and compared that amount to the forfeiture amount.
As a result, the Bureau determined that the percentage of gross
revenues represented by the forfeiture amount was within a range
generally considered to be payable.13 While it is true that PJB
recognizes that in some cases other financial indicators such as
net losses may be relevant, it is not generally the case that net
losses alone will mandate cancellation or reduction of a
forfeiture. As a matter of fact, PJB goes on to point out that
if gross revenues are sufficiently great, the mere fact that a
business is operating at a loss does not itself mean that it can
not afford to pay a forfeiture.14 In Renaissance, the case cited
by Pilgrim, the Bureau considered Renaissance's financial
statements as well as its bankruptcy filing in determining that
Renaissance could not pay the forfeiture. Here, we do not have
such a severe financial situation that it has resulted in a
bankruptcy filing. Moreover, Pilgrim has significant gross
revenues in all three of the years that its financial
documentation was reviewed and, when depreciation is added back,
net income in two of those years. Under the circumstances, we
find that neither cancellation nor reduction of the forfeiture is
IV. ORDERING CLAUSES
6. Accordingly, IT IS ORDERED that, pursuant to Section
405 of the Act15 and Section 1.106 of the Rules,16 Pilgrim
Communications, Inc.'s petition for reconsideration of the May
19, 2004 Forfeiture Order IS hereby DENIED.
7. IT IS ALSO ORDERED that, pursuant to Section 503(b) of
the Act, and Sections 0.111, 0.311 and 1.80(f)(4) of the Rules,17
Pilgrim Communications, Inc., IS LIABLE FOR A MONETARY FORFEITURE
in the amount of nineteen thousand dollars ($19,000) for willful
and repeated violation of Sections 11.35, 73.1125(a), 73.1560(a)
and 73.1745(a) of the Rules.
8.Payment of the forfeiture shall be made in the manner
provided in Section 1.80 of the Rules within 30 days of the
release of the 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.18
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 Federal Communications Commission, P.O.
Box 358340, Pittsburgh, PA 15251-8340. Payment by overnight mail
may be sent to Mellon Bank /LB 358340, 500 Ross Street, Room
1540670, Pittsburgh, PA 15251. Payment by wire transfer may be
made to ABA Number 043000261, receiving bank Mellon Bank, and
account number 911-6106.
9. IT IS FURTHER ORDERED that this Order shall be
sent by regular mail and by certified mail, return receipt
requested, to Pilgrim's counsel, Christopher L. Robbins, Esq.,
Wiley, Rein, and Fielding LLP, 1776 K Street, NW, Washington, DC
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Acting Chief, Enforcement Bureau
1 Pilgrim filed a consolidated petition for reconsideration to
encompass the instant Forfeiture Order and the Forfeiture Order
issued to it for violations at Station KSKE(AM). See Pilgrim
Communications, Inc., 19 FCC Rcd 8877 (2004). We address the
arguments raised regarding KSKE in a separate Memorandum Opinion
2 Pilgrim Communications, Inc., 19 FCC Rcd 8881 (Enf. Bur.
3 47 C.F.R. §§ 11.35, 73.1125(a), 73.1560(a), and 73.1745(a).
4 Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
200332800005 (Enf. Bur., Denver Office, November 20, 2002).
5 PJB Communications of Virginia, Inc., 7 FCC Rcd 2088 (1992).
6 Id. at 2089.
7 19 FCC Rcd 10494 (Enf. Bur., 2004).
8 47 U.S.C. § 503(b).
9 47 C.F.R. § 1.80.
10 12 FCC Rcd. 17087 (1997), recon. denied, 15 FCC Rcd. 303
11 47 U.S.C. § 503(b)(2)(D).
12 PJB at 2089.
13 Id. at 2089 (forfeiture not deemed excessive where it
represented approximately 2.02 percent of the violator's gross
revenues); Hoosier Broadcasting Corporation, 15 FCC Rcd 8640,
8641 (Enf. Bur. 2002) (forfeiture not deemed excessive where it
represented approximately 7.6 percent of the violator's gross
revenues); Afton Communications Corp., 7 FCC Rcd 6741 (Com. Car.
Bur. 1992) (forfeiture not deemed excessive where it represented
approximately 3.9 percent of the violator's gross revenues).
14 Id. at 2089.
15 47 U.S.C. § 405.
16 47 C.F.R. § 1.106.
17 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
18 See 47 U.S.C. § 504(a).