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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                   )                                
                                                                    
     In the Matter of              )                                
                                       File Number: EB-11-PA-0153   
     Tesla Exploration, Inc.       )                                
                                       NAL/Acct. No.: 201232400008  
     Licensee of Station KD29596   )                                
                                       FRN: 0021136999              
     Greenwood Village, Colorado   )                                
                                                                    
                                   )                                


                  NOTICE OF APPARENT LIABILITY FOR FORFEITURE

   Adopted: August 2, 2012 Released: August 3, 2012

   By the Commission:

   I. INTRODUCTION

    1. In this Notice of Apparent Liability for Forfeiture (NAL), we find
       that Tesla Exploration, Inc. (Tesla), licensee of Station KD29596,
       apparently willfully and repeatedly violated Section 301 of the
       Communications Act of 1934, as amended (Act), and Section 1.903(a) of
       the Commission's rules (Rules), by operating radio transmitting
       equipment without a license on eleven unauthorized frequencies. We
       conclude that Tesla is apparently liable for a forfeiture in the
       amount of sixty-six thousand dollars ($66,000).

   II. BACKGROUND

    2. On July 31, 2011, the FCC Enforcement Bureau's Philadelphia Office
       (Philadelphia Office) received a complaint from the McKean County 911
       Operations Center in Smethport, Pennsylvania (McKean), stating that an
       unidentified pulsing data signal was causing harmful interference to
       its primary repeater input frequency, 158.940 MHz. McKean reported
       that the interference began around July 28, 2011, and was disrupting
       communications between the police dispatch center and police mobile
       units.

    3. On August 5, 2011, agents from the Philadelphia Office used radio
       direction-finding techniques to locate the source of the interfering
       radio transmissions on 158.940 MHz to a tower-mounted antenna in
       Bigler, Pennsylvania near the coordinates 40.9736 North Latitude,
       78.3252 West Longitude. While at the antenna site, the agents also
       detected simultaneous pulse transmissions from unidentified sources on
       the frequencies 156.525 MHz, 156.875 MHz, 157.350 MHz, 157.750 MHz,
       and 158.400 MHz. Altogether, the agents determined that six
       unauthorized frequencies were being used. Later that day, the agents
       met with the property owner and an employee working at the site who
       informed the agents that the radio transmitting equipment that was
       operating on the unauthorized frequencies was part of a multi-site,
       multi-frequency geo-surveying project that Tesla was conducting in the
       Bigler, Pennsylvania area.

    4. On September 24, 2011, the Philadelphia Office sent a Letter of
       Inquiry to Tesla seeking to determine whether Tesla had operated on
       unauthorized frequencies and the dates, if any, on which the company
       had commenced operation on any such frequencies. On October 11, 2011,
       Tesla responded to the Letter of Inquiry and acknowledged that it was
       responsible for the operation of the radio transmitting equipment on
       the unauthorized frequencies observed by the agents on August 5, 2011.
       Tesla reported that it deployed fixed transmitter sites on these
       frequencies on a staggered schedule between July 3, 2011, and July 29,
       2011, as part of a geo-surveying project in Bigler, Pennsylvania.
       Tesla admitted that it did not have authorization to operate fixed
       radio transmitting equipment on any of the six frequencies observed by
       the agents. In response to a Bureau inquiry, Tesla also admitted that,
       during this same time period, it operated radio transmitting equipment
       on five additional frequencies for which it also was not
       authorized-161.655 MHz, 162.210 MHz, 152.120 MHz, 160.00 MHz, and
       153.305 MHz. In total, Tesla acknowledged operating on eleven
       unauthorized frequencies in Bigler, Pennsylvania, at eleven different
       locations. Tesla provided no explanation for its unauthorized
       operations.

    5. On December 7, 2011, the agents returned to the Bigler, Pennsylvania
       area to conduct monitoring and did not detect emissions on any of the
       eleven frequencies. The agents also drove to the site where Tesla
       operated on the frequency 158.940 MHz and observed that the radio
       transmitting equipment had been dismantled.

   III. DISCUSSION

    6. Section 503(b) of the Communications Act of 1934, as amended (Act),
       provides that any person who willfully or repeatedly fails to comply
       substantially with the terms and conditions of any license, or
       willfully or repeatedly fails to comply with any of the provisions of
       the Act or of any rule, regulation, or order issued by the Commission
       thereunder, shall be liable for a forfeiture penalty. 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. 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, and the Commission has so
       interpreted the term in the Section 503(b) context. The Commission may
       also assess a forfeiture for violations that are merely repeated, and
       not willful. The term "repeated" means the commission or omission of
       such act more than once or for more than one day.

   A. Operation of Radio Transmitting Equipment on Unauthorized Frequencies

    7. Section 301 of the Act states that no person shall use or operate any
       apparatus for the transmission of energy or communications or signals
       by radio within the United States, except under and in accordance with
       the Act and with a license issued by the Commission. Section 1.903(a)
       of the Rules provides that stations in the Wireless Radio Services
       must be used and operated only in accordance with the rules applicable
       to their particular service and with a valid authorization granted by
       the Commission. Section 1.903(b) further provides that the "holding of
       an authorization does not create any rights beyond the terms,
       conditions, and period specified in the authorization." 

    8. As the record reflects, on August 5, 2011, Enforcement Bureau agents
       found that Tesla operated radio transmitting equipment on the
       frequencies 156.525 MHz, 156.875 MHz, 157.350 MHz, 157.750 MHz,
       158.400 MHz, and 158.940 MHz. Tesla later admitted to operating on
       those frequencies from six different fixed locations as well as
       operating on an additional five unauthorized frequencies at five
       different locations-161.655 MHz, 162.210 MHz, 152.120 MHz, 160.00 MHz,
       and 153.305 MHz. While Tesla held an FCC license to operate mobile or
       portable radio transmitting equipment on various frequencies in the
       Land Mobile Radio Service on a nationwide basis, the license did not
       authorize Tesla to operate radio transmitting equipment at fixed
       locations, and nor did the license authorize Tesla to operate on the
       eleven aforementioned frequencies. Based on the evidence before us, we
       find that Tesla apparently willfully and repeatedly violated Section
       301 of the Act and Section 1.903(a) of the Rules by operating radio
       transmitting equipment on the frequencies 156.525 MHz, 156.875 MHz,
       157.350 MHz, 157.750 MHz, 158.400 MHz, 158.940 MHz, 161.655 MHz,
       162.210 MHz, 152.120 MHz, 160.00 MHz, and 153.305 MHz without
       authorization.

    B. Proposed Forfeiture Amount

    9. Pursuant to the Commission's Forfeiture Policy Statement and Section
       1.80 of the Rules, the base forfeiture amount for operating radio
       transmitting equipment on an unauthorized frequency is $4,000. In
       assessing the monetary forfeiture amount, we must also take into
       account the statutory factors set forth in Section 503(b)(2)(E) of the
       Act, which include the nature, circumstances, extent, and gravity of
       the violations, 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.

   10. The record evidence in this case shows that Tesla operated on eleven
       unauthorized frequencies for which it had no authorization, which
       would result in a $44,000 total proposed forfeiture if we applied the
       base forfeiture for each violation. We find, however, that the
       violations here warrant a significant increase from the base
       forfeiture amount. First, the significant number of apparent
       violations demonstrates egregious misconduct and disregard for the Act
       and the Commission's licensing requirements. In addition, Tesla's
       unauthorized operation on frequency 158.940 MHz was particularly
       serious because it caused interference to the McKean County 911
       Operations Center, disrupting communications between the police
       dispatch center and police mobile units. Further, because Tesla is
       part of a large, multinational company, a forfeiture above the base
       forfeiture amount is necessary to ensure that the forfeiture serves as
       an effective deterrent (and not simply a cost of doing business)
       against Tesla's future noncompliance with the Commission's licensing
       requirements. Accordingly, applying the Forfeiture Policy Statement,
       Section 1.80 of the Rules, and the statutory factors to the instant
       case, we conclude that Tesla is apparently liable for a total
       forfeiture in the amount of $66,000-$4,000 for each of the eleven
       unauthorized frequencies ($44,000) plus a 50 percent ($22,000) upward
       adjustment.

   IV. ORDERING CLAUSES

   11. Accordingly, IT IS ORDERED that, pursuant to Section 503(b) of the
       Communications Act of 1934, as amended, and Section 1.80 of the
       Commission's rules, Tesla Exploration, Inc. is hereby NOTIFIED of this
       APPARENT LIABILITY FOR A FORFEITURE in the amount of sixty-six
       thousand dollars ($66,000) for violations of Section 301 of the Act
       and Section 1.903(a) of the Rules.

   12. IT IS FURTHER ORDERED that, pursuant to Section 1.80 of the
       Commission's rules, within thirty (30) calendar days of the release
       date of this Notice of Apparent Liability for Forfeiture, Tesla
       Exploration, Inc. SHALL PAY the full amount of the proposed forfeiture
       or SHALL FILE a written statement seeking reduction or cancellation of
       the proposed forfeiture.

   13. Payment of the forfeiture must be made by check or similar instrument,
       wire transfer, or credit card, and must include the NAL/Account number
       and FRN referenced above. Tesla Exploration, Inc. will also send
       electronic notification on the date said payment is made to
       NER-Response@fcc.gov. Regardless of the form of payment, a completed
       FCC Form 159 (Remittance Advice) must be submitted. When completing
       the FCC Form 159, enter the Account Number in block number 23A (call
       sign/other ID) and enter the letters "FORF" in block number 24A
       (payment type code).   Below are additional instructions you should
       follow based on the form of payment you select:

     * Payment by check or money order must be made payable to the order of
       the Federal Communications Commission.  Such payments (along with the
       completed Form 159) must be mailed to Federal Communications
       Commission, P.O. Box 979088, St. Louis, MO 63197-9000, or sent
       via overnight mail to U.S. Bank - Government Lockbox #979088,
       SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO 63101. 

     * Payment by wire transfer must be made to ABA Number 021030004,
       receiving bank TREAS/NYC, and Account Number 27000001.  To complete
       the wire transfer and ensure appropriate crediting of the wired funds,
       a completed Form 159 must be faxed to U.S. Bank at (314) 418-4232 on
       the same business day the wire transfer is initiated. 

     * Payment by credit card must be made by providing the required credit
       card information on FCC Form 159 and signing and dating the Form 159
       to authorize the credit card payment. The completed Form 159 must then
       be mailed to Federal Communications Commission, P.O. Box 979088, St.
       Louis, MO 63197-9000, or sent via overnight mail to U.S. Bank -
       Government Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St.
       Louis, MO 63101. 

   14. Any request for full payment under an installment plan should be sent
       to:  Chief Financial Officer-Financial Operations, Federal
       Communications Commission, 445 12th Street, S.W., Room 1-A625,
       Washington, D.C.  20554.  If you have questions regarding payment
       procedures, please contact the Financial Operations Group Help Desk by
       phone, 1-877-480-3201, or by e-mail, ARINQUIRIES@fcc.gov.

   15. The written statement seeking reduction or cancellation of the
       proposed forfeiture, if any, must include a detailed factual statement
       supported by appropriate documentation and affidavits pursuant to
       Sections 1.16 and 1.80(f)(3) of the Rules. Mail the written statement
       to Federal Communications Commission, Enforcement Bureau, Northeast
       Region, Philadelphia Office, One Oxford Valley Building, Suite 404,
       2300 East Lincoln Highway, Langhorne, Pennsylvania 19047, and include
       the NAL/Acct. No. referenced in the caption. Tesla Exploration, Inc.
       also shall e-mail the written response to NER-Response@fcc.gov.

   16. The Commission will not consider reducing or canceling a forfeiture in
       response to a claim of inability to pay unless the petitioner 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 petitioner'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.

   17. IT IS FURTHER ORDERED that a copy of this Notice of Apparent Liability
       for Forfeiture shall be sent by both Certified Mail, Return Receipt
       Requested, and First Class Mail to Tesla Exploration, Inc. at 6430
       South Fiddlers Green Circle, Suite 100, Attn: Quinten Bailey,
       Greenwood Village, Colorado 80111.

   FEDERAL COMMUNICATIONS COMMISSION

   Marlene H. Dortch

   Secretary

   47 U.S.C. S: 301.

   47 C.F.R. S: 1.903(a).

   The main police dispatch system for McKean operates on 158.940 MHz, which
   is a public safety pool frequency as detailed in Section 90.20 of the
   Rules. See 47 C.F.R. S: 90.20.

   Letter of Inquiry from Gene Stanbro, District Director of the Enforcement
   Bureau's Philadelphia Office, to Tesla-Conquest, Inc. (Sept. 14, 2011) (on
   file in EB-11-PA-0153) (LOI).

   Response to Letter of Inquiry from David K. Buttle, President, Tesla
   Exploration, Inc. to Enforcement Bureau's Philadelphia Office (Oct. 10,
   2011) (on file in EB-11-PA-0153) (LOI Response).

   Id. at 1.

   In its LOI Response, Tesla stated that Conquest Seismic Services, Inc., a
   predecessor entity to Tesla, was authorized to operate mobile and portable
   equipment on the frequency 158.400 MHz under the call sign WQJV782, but
   that the license was not transferred to Tesla. See id. at 1-2. Our records
   show that Tesla also held an FCC license under call sign KD29596, which
   authorized it to operate mobile or portable radio transmitting equipment
   on various frequencies in the Land Mobile Radio Service on a nationwide
   basis, but the license did not, at the time of the inspection, authorize
   Tesla to operate radio transmitting equipment at fixed locations, and nor
   did the license authorize Tesla to operate on any of the frequencies at
   issue in this NAL. Thus, at the time of the inspection, Tesla had no
   license authorizing it to operate any radio transmitting equipment in
   Bigler, Pennsylvania on the frequencies 156.525 MHz, 156.875 MHz, 157.350
   MHz, 157.750 MHz, 158.400 MHz, or 158.940 MHz.

   Id. at 1.

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

   47 U.S.C. S: 312(f)(1).

   H.R. Rep. No. 97-765, 97th Cong. 2d Sess. 51 (1982) ("This provision
   [inserted in section 312] defines the terms `willful' and `repeated' for
   purposes of section 312, and for any other relevant section of the act
   (e.g., section 503) . . . . As defined[,] . . . `willful' means that the
   licensee knew that he was doing the act in question, regardless of whether
   there was an intent to violate the law. `Repeated' means more than once,
   or where the act is continuous, for more than one day. Whether an act is
   considered to be `continuous' would depend upon the circumstances in each
   case. The definitions are intended primarily to clarify the language in
   sections 312 and 503, and are consistent with the Commission's application
   of those terms . . . .").

   See, e.g., Application for Review of Southern California Broadcasting Co.,
   Memorandum Opinion and Order, 6 FCC Rcd 4387, 4388 (1991), recons. denied,
   7 FCC Rcd 3454 (1992).

   See, e.g., Callais Cablevision, Inc., Notice of Apparent Liability for
   Monetary Forfeiture, 16 FCC Rcd 1359, 1362, para. 10 (2001) ("Callais
   Cablevision, Inc.") (proposing a forfeiture for, inter alia, a cable
   television operator's repeated signal leakage).

   Section 312(f)(2) of the Act, 47 U.S.C. S: 312(f)(2), which also applies
   to violations for which forfeitures are assessed under Section 503(b) of
   the Act, provides that "[t]he term 'repeated', when used with reference to
   the commission or omission of any act, means the commission or omission of
   such act more than once or, if such commission or omission is continuous,
   for more than one day."

   47 U.S.C. S: 301.

   47 C.F.R. S: 1.903(b).

   LOI Response at 1-2.

   The Commission's Forfeiture Policy Statement and Amendment of Section 1.80
   of the Rules to Incorporate the Forfeiture Guidelines, Report and Order,
   12 FCC Rcd 17087 (1997) (Forfeiture Policy Statement), recons. denied, 15
   FCC Rcd 303 (1999); 47 C.F.R. S: 1.80.

   47 U.S.C. S: 503(b)(2)(E).

   See Forfeiture Policy Statement, 12 FCC Rcd at 17099-100, para. 24
   (stating need to take into account a violator's ability to pay in
   determining the amount of a forfeiture to guarantee that forfeitures
   issued against large or highly profitable entities are not considered
   merely an affordable cost of doing business); see also T-Mobile USA, Inc.,
   Notice of Apparent Liability for Forfeiture, FCC 12-39, 2012 WL 1305323 at
   * 7, para. 25 (rel. April 13, 2012) (finding that it was appropriate to
   consider T-Mobile USA, Inc.'s total annual revenues as a basis for
   upwardly adjusting the base forfeiture amount). Tesla is a wholly-owned
   subsidiary of Tesla Exploration, Ltd., a Canadian company, and is
   responsible for Tesla Exploration Ltd.'s operations in the United States.
   Tesla Exploration Ltd. reported earnings in 2011 of $225.4 Canadian
   Dollars (approximately $220.19 Million US Dollars). See CoinMill.com - The
   Currency Converter, available at http://www.coinmill.com (last visited
   June 18, 2012). See also "Tesla Exploration, Ltd., Annual Consolidated
   Financial Statements for the Years Ended December 31, 2011 and 2010,"
   available at www.teslaexploration.com. It is well-established Commission
   policy to consider the revenues of a violator's parent company. See, e.g.,
   SM Radio, Inc., Order on Review, 23 FCC Rcd 2429, 2433, para. 12 (2008)
   (citations omitted).

   47 U.S.C. S:S: 503(b), 301; 47 C.F.R. S:S: 1.80, 1.903(a).

   An FCC Form 159 and detailed instructions for completing the form may be
   obtained at http://www.fcc.gov/Forms/Form159/159.pdf.

   See 47 C.F.R. S: 1.1914.

   47 C.F.R. S:S: 1.16, 1.80(f)(3).

   (...continued from previous page)

                                                              (continued....)

   Federal Communications Commission FCC 12-88

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   Federal Communications Commission FCC 12-88