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Federal Communications Commission DA 13-684
Before the
Federal Communications Commission
Washington, DC 20554
In the Matter of 1 UGLY ENTERPRISE, LLC Applicant in Auction No. 79 ) ) )
) ) ) ) File No.: EB-09-IH-1532 Acct. No.: 201332080019 FRN: 0018897280
ORDER
Adopted: May 9, 2013 Released: May 14, 2013
By the Chief, Enforcement Bureau:
1. In this Order, we adopt a Consent Decree entered into between the
Enforcement Bureau (Bureau) of the Federal Communications Commission
and 1 Ugly Enterprise, LLC (1 Ugly Enterprise). The Consent Decree
terminates the Bureau's investigation into possible violations by 1
Ugly Enterprise of Section 1.2105(c) of the Commission's Rules, 47
C.F.R. S 1.2105(c), relating to prohibited contacts and communications
and the non-disclosure of such contacts and communications in
Commission auctions.
2. A copy of the Consent Decree, negotiated by the Bureau and 1 Ugly
Enterprise, is attached hereto and incorporated herein by reference.
3. After evaluating the facts before us and reviewing the terms of the
Consent Decree, we find that the public interest would be served by
adopting the Consent Decree and terminating the investigation.
4. In the absence of material new evidence relating to this matter, we
conclude that our investigation raises no substantial or material
questions of fact as to whether 1 Ugly Enterprise possesses the basic
qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
5. Accordingly, IT IS ORDERED that, pursuant to Sections 4(i) and 503(b)
of the Communications Act of 1934, as amended,^ and Sections 0.111 and
0.311 of the Rules,^ the Consent Decree attached to this Order IS
ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
7. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to: James L. Oyster, Esq., counsel for 1 Ugly, LLC, 108
Oyster Lane, Castleton, VA 22716-2839.
FEDERAL COMMUNICATIONS COMMISSION
P. Michele Ellison
Chief, Enforcement Bureau
Federal Communications Commission DA 13-684
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of 1 UGLY ENTERPRISE, LLC Applicant in Auction No. 79 ) ) )
) ) ) File No. EB-09-IH-1532 Acct. No. 201332080019 FRN No. 0018897280
CONSENT DECREE
1. The Enforcement Bureau of the Federal Communications Commission, 1
Ugly Enterprise, LLC, and Matthew Salazar, by their authorized
representatives, hereby enter into this Consent Decree for the purpose
of terminating the Enforcement Bureau's investigation into possible
violations by 1 Ugly Enterprise of Section 1.2105(c) of the
Commission's Rules,^ relating to prohibited contacts and
communications in Commission auctions.
I. DEFINITIONS
2. For purposes of this Consent Decree, the following definitions shall
apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C. S
151 et seq.
b. "Adopting Order" means an order of the Bureau adopting this Consent
Decree without any modifications adverse to 1 Ugly Enterprise, LLC.
c. "1 Ugly Enterprise" or the "Company" means 1 Ugly Enterprise, LLC, of
which Matthew Salazar is the sole principal, and its
predecessors-in-interest and successors-in-interest.
d. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
e. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
f. "Communications Laws" means collectively, the Act, the Rules, and the
published and promulgated orders and decisions of the Commission to
which 1 Ugly Enterprise is subject by virtue of its business
activities.
g. "Deborah Salazar" means Deborah Salazar, an applicant in Auction No.
79.
h. "Effective Date" means the date on which the Bureau releases the
Adopting Order.
i. "Investigation" means the Bureau's investigation of 1 Ugly
Enterprise's compliance with Section 1.2105(c) of the Commission's
rules, arising from its conduct in Auction No. 79.
j. "Jesus Salazar" means Matthew Salazar's father, Deborah Salazar's
spouse, and an authorized bidder for Deborah Salazar in Auction No.
79.
k. "Matthew Salazar" means the sole principal of 1 Ugly Enterprise and
the son of Deborah Salazar and Jesus Salazar.
l. "Parties" means the Bureau, 1 Ugly Enterprise, LLC and Matthew
Salazar, each of which is a "Party."
m. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
II. BACKGROUND
3. Section 1.2105(c)(1) of the Rules, commonly referred to as the
Commission's "anti-collusion rule," prohibits auction applicants for
licenses in any of the same geographic license areas from "cooperating
or collaborating with respect to, discussing with each other, or
disclosing to each other in any manner the substance of their own, or
each other's, or any other competing applicants' bids or bidding
strategies, or discussing or negotiating settlement agreements" ^
beginning immediately after the short-form application filing deadline
until after the down payment deadline "unless such applicants are
members of a bidding consortium or other joint bidding arrangement
identified on the bidder's short-form application . . . ."^ In
addition, Section 1.2105(c)(6) of the Rules requires that "[a]ny
applicant that makes or receives a communication of bids or bidding
strategies prohibited under [Section 1.2105(c)(1) of the Rules] shall
report such communication in writing to the Commission immediately,
and in no case later than five business days after the communication
occurs."^
4. On February 27, 2009, the Commission's Wireless Telecommunications
Bureau and Media Bureau announced the auction of 122 FM broadcast
construction permits in Auction No. 79.^ For Auction No. 79, the
anti-collusion rule prohibitions were in effect from 6:00 p.m. ET on
June 25, 2009, the short-form application filing deadline, until
October 2, 2009, the down payment deadline. ^ Bidding in Auction No.
79 began on September 1, 2009, and concluded on September 15, 2009.
5. 1 Ugly Enterprise is a limited liability company based in San Angelo,
Texas. Its sole owner is Matthew Salazar. Deborah Salazar is an
individual residing in Uvalde, Texas and is the mother of Matthew
Salazar. On June 25, 2009, 1 Ugly Enterprise and Deborah Salazar each
submitted a short-form application to participate in Auction No. 79.^
1 Ugly Enterprise selected nine construction permits on which it
intended to bid in Auction No. 79, including the construction permit
for the Peach Springs, Arizona, market. Deborah Salazar also
identified the construction permit for the Peach Springs, Arizona,
market as among the construction permits on which she intended to bid.
Additionally, in its short-form application, 1 Ugly Enterprise
identified Matthew Salazar as its sole authorized bidder. In her
short-form application, Deborah Salazar specified that she and her
spouse, Jesus Salazar, father of Matthew Salazar, would serve as
authorized bidders. Neither 1 Ugly Enterprise nor Deborah Salazar
identified the existence of any joint bidding consortium or agreement
between them nor did they disclose that Deborah Salazar and Jesus
Salazar were Matthew Salazar's parents. Because these two applicants
did not disclose the existence of any bidding agreement between them,
the Commission's anti-collusion rule prohibited them from
communicating with each other about bids or bidding strategies during
the prescribed period.
6. At the conclusion of Auction No. 79, 1 Ugly Enterprise was the winning
bidder for an FM construction permit in Leakey, Texas. Thereafter, on
July 31, 2009, 1 Ugly Enterprise submitted its upfront payment to the
Commission along with a Remittance Advice Form (FCC Form 159). A
review of the FCC Form 159 revealed that Jesus Salazar, the authorized
bidder for Deborah Salazar, had signed the FCC Form 159 certifying
that he was the responsible party for making 1 Ugly Enterprise's
upfront payment of $2,500. This prompted the Wireless
Telecommunications Bureau to refer the matter to the Enforcement
Bureau for investigation of a potential violation of Section 1.
2105(c) of the Commission's Rules.
7. On October 22, 2009, the Enforcement Bureau commenced its
Investigation by issuing letters of inquiry to 1 Ugly Enterprise,
Deborah Salazar, and Jesus Salazar. The letters of inquiry sought
information about, among other things, their respective conduct in
Auction No. 79. In its response, 1 Ugly Enterprise stated that Matthew
Salazar had communicated with Jesus Salazar a short time prior to the
commencement of bidding regarding the construction permits on which 1
Ugly Enterprise intended to bid in Auction No. 79. The record also
revealed that Jesus Salazar had paid 1 Ugly Enterprise's upfront
payment from his own account to the Commission's auction payment
lockbox bank, the U.S. Bank in St. Louis, Missouri. The record also
revealed that Deborah Salazar had called Jesus Salazar's bank to
initiate the wire transfer for 1 Ugly Enterprise. Neither 1 Ugly
Enterprise nor Deborah Salazar notified the Commission about the
communication between the two applicants, or between 1 Ugly Enterprise
and Jesus Salazar.
8. Following the Investigation, the Bureau, 1 Ugly Enterprise and Matthew
Salazar entered into discussions aimed at resolving the Investigation.
Between April and November, 2012, 1 Ugly Enterprise provided financial
information to the Bureau documenting its claimed inability to pay a
large forfeiture or voluntary contribution.
III. TERMS OF AGREEMENT
9. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order.
10. Jurisdiction. 1 Ugly Enterprise and Matthew Salazar agree that the
Bureau has jurisdiction over them and the matters contained in this
Consent Decree and that the Bureau has authority to enter into and
adopt this Consent Decree.
11. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the Effective Date as defined herein. As of
the Effective Date, the Adopting Order and this Consent Decree shall
have the same force and effect as any other order of the Commission.
Any violation of the Adopting Order or of the terms of this Consent
Decree shall constitute a separate violation of a Commission Order,
entitling the Commission to exercise any rights and remedies attendant
to the enforcement of a Commission order.
12. Termination of Investigation. 1 Ugly Enterprise represents that it
does not hold any FCC licenses or authorizations other than the
construction permit that it won in Auction No. 79 for a new FM station
at Leakey, Texas. Matthew Salazar represents that he does not
individually hold any FCC licenses or authorizations. In express
reliance on the covenants and representations in this Consent Decree
and to avoid further expenditure of public resources, the Bureau
agrees to terminate the Investigation. In consideration for the
termination of the Investigation, 1 Ugly Enterprise and Matthew
Salazar agree to the terms, conditions, and procedures contained
herein. The Bureau further agrees that in the absence of new material
evidence, the Bureau will not use the facts developed in the
Investigation through the Effective Date, or the existence of this
Consent Decree, to institute on its own motion, any new proceeding,
formal or informal, or take any action on its own motion against 1
Ugly Enterprise or Matthew Salazar concerning the matters that were
the subject of the Investigation. The Bureau also agrees that in the
absence of new material evidence, it will not use the facts developed
in the Investigation through the Effective Date, or the existence of
this Consent Decree, to institute on its own motion, any proceeding,
formal or informal, or take any action on its own motion against 1
Ugly Enterprise with respect to 1 Ugly Enterprise's basic
qualifications, including its character qualifications to be a
Commission licensee or to hold Commission licenses or authorizations.
13. Settlement Terms. For purposes of settling the matters set forth
herein, 1 Ugly Enterprise and Matthew Salazar agree to the following:
a. 1 Ugly Enterprise agrees that within five (5) business days of the
Effective Date, it shall surrender to the Commission for cancellation
the construction permit it won in Auction No. 79. It shall
simultaneously send electronic notification of the surrender of its
construction permit to Theresa Z. Cavanaugh at
[1]Terry.Cavanaugh@fcc.gov and to Brian J. Carter at
[2]Brian.Carter@fcc.gov.
a. 1 Ugly Enterprise agrees to forfeit any and all monies paid to U.S.
Bank relating in any manner whatsoever to its participation in
Auction No. 79, and relinquish any claims thereto, including, but not
limited to, its upfront payment, down payment, and any payments 1
Ugly made in connection with the construction permit for which it was
the highest bidder.
b. 1 Ugly Enterprise agrees that it will not participate in any future
auctions conducted by the Commission.
c. Matthew Salazar agrees that he: (i) will not participate in any
future auctions conducted by the Commission in his own capacity; (ii)
will not participate in any future auctions conducted by the
Commission on behalf of any other person or entity; and (iii) will
not hold a position or interest of any kind and to any extent
whatsoever (financial or otherwise) in an entity that participates in
any future auctions conducted by the Commission. Nothing in this
subparagraph shall prevent Matthew Salazar from holding a position or
interest in an entity that is publicly traded on the New York Stock
Exchange or the NASDAQ Stock Market.
14. Compliance Reports. I Ugly Enterprise and Matthew Salazar shall each
file a Compliance Report with the Commission ninety (90) calendar days
after the Effective Date, twelve (12) months after the Effective Date,
twenty-four (24) months after the Effective Date, and thirty-six (36)
months after the Effective Date. 1 Ugly Enterprise and Matthew Salazar
shall certify in their respective Compliance Reports to their
compliance with the terms and conditions contained in this Consent
Decree. If they are unable to provide the requisite certification,
they shall provide a full and complete explanation of the reasons why
they are not able to do so. All Compliance Reports shall be submitted
to the Chief, Investigations and Hearings Division, Enforcement
Bureau, Federal Communications Commission, Room 4-C330, 445 12th
Street, S.W., Washington, D.C. 20554, with copies submitted
electronically to Theresa Z. Cavanaugh at Terry.Cavanaugh@fcc.gov and
to Brian J. Carter at [3]Brian.Carter@fcc.gov.
15. Voluntary Contribution. 1 Ugly Enterprise agrees that it will make a
voluntary contribution to the United States Treasury in the total
amount of $5,000.00. This amount was arrived at after careful
consideration of 1 Ugly Enterprise's claimed inability to pay a large
voluntary contribution and documentation submitted by 1 Ugly
Enterprise to the Bureau in support thereof. The total payment shall
be made within 30 days after the Effective Date. 1 Ugly Enterprise
shall also send electronic notification of payment to Theresa Z.
Cavanaugh at [4]Terry.Cavanaugh@fcc.gov and to Brian J. Carter at
[5]Brian.Carter@fcc.gov on the date said payment is made. The payment
must be made by check or similar instrument, wire transfer, or credit
card, and must include the NAL/Account number and FRN referenced
above. 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 regarding the form of
payment:^
o 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.
o 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.
o 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.
Questions regarding payment procedures should be addressed to the
Financial Operations Group Help Desk by phone at 1-877-480-3201, or by
e-mail at [6]ARINQUIRIES@fcc.gov.
16. Waivers. 1 Ugly Enterprise and Matthew Salazar waive any and all
rights they may have to seek administrative or judicial
reconsideration, review, appeal or stay, or to otherwise challenge or
contest the validity of this Consent Decree and the Adopting Order,
provided the Bureau issues an Adopting Order as defined herein. 1 Ugly
Enterprise and Matthew Salazar shall retain the right to challenge
Commission interpretation of the Consent Decree or any terms contained
herein. If any Party (or the United States on behalf of the
Commission), brings a judicial action to enforce the terms of the
Adopting Order, neither 1 Ugly Enterprise, Matthew Salazar nor the
Commission shall contest the validity of the Consent Decree or of the
Adopting Order, and 1 Ugly Enterprise and Matthew Salazar shall waive
any statutory right to a trial de novo. 1 Ugly Enterprise and Matthew
Salazar hereby agree to waive any claims they may otherwise have under
the Equal Access to Justice Act^ relating to the matters addressed in
this Consent Decree.
17. Invalidity. In the event that this Consent Decree in its entirety is
rendered invalid by any court of competent jurisdiction, it shall
become null and void and may not be used in any manner in any legal
proceeding.
18. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent Rule or order adopted by
the Commission (except an order specifically intended to revise the terms
of the Consent Decree to which 1 Ugly Enterprise and Matthew Salazar do
not expressly consent) that provision will be superseded by such Rule or
Commission order.
19. Successors and Assigns. 1 Ugly Enterprise agrees that the provisions
of this Consent Decree shall be binding on its successors, assigns, and
transferees.
20. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties with
respect to the Investigation. The Parties further agree that this Consent
Decree does not constitute either an adjudication on the merits or a
factual or legal finding or determination regarding any compliance or
noncompliance with the Communications Laws.
21. Modifications. This Consent Decree cannot be modified without the
advance written consent of all Parties.
22. Paragraph Headings. The headings of the paragraphs in this Consent
Decree are inserted for convenience only and are not intended to affect
the meaning or interpretation of this Consent Decree.
23. Authorized Representative. The individual signing this Consent Decree
on behalf of 1 Ugly Enterprise represents and warrants that he is
authorized by 1 Ugly Enterprise to execute this Consent Decree and to bind
1 Ugly Enterprise to the obligations set forth herein. The FCC signatory
represents that she is signing this Consent Decree in her official
capacity and that she is authorized to execute this Consent Decree.
24. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed and
delivered, shall be an original, and all of which counterparts together
shall constitute one and the same fully executed instrument.
By: _____________________________________ By:
_______________________________
P. Michele Ellison, Chief Matthew Salazar, individually, and Enforcement
Bureau on behalf of 1 Ugly Enterprise, LLC
Federal Communications Commission
Date: ___________________________________ Date:
_____________________________
^ 47 U.S.C. SS 154(i), 503(b).
^ 47 C.F.R. SS 0.111, 0.311.
^ 47 C.F.R. S 1.2105(c).
^ 47 C.F.R. S 1.2105(c)(1).
^ Id. S 1.2105(c)(6).
^ Auction of FM Broadcast Construction Permits Scheduled for September 1,
2009; Comment Sought on Competitive Bidding Procedures For Auction 79,
Public Notice, 24 FCC Rcd 2589 (2009).
^ Auction of FM Broadcast Construction Permits Scheduled for September 1,
2009; Notice and Filing Requirements, Minimum Opening Bids, Upfront
Payments and Other Procedures for Auction 79, Public Notice, 24 FCC Rcd
4448 (2009).
^ See FCC Form 175 of 1 Ugly Enterprise, LLC, Application to Participate
in an FCC Auction, submitted on June 25, 2009 at 2:53 p.m. ET; FCC Form
175 of Deborah Salazar, Application to Participate in an FCC Auction,
submitted on June 25, 2009 at 2:52 p.m. ET. 1 Ugly Enterprise and Deborah
Salazar were classified as eligible to participate in the auction. See
Auction of FM Broadcast Construction Permits: 77 Bidders Qualified to
Participate in Auction 79, Public Notice, 24 FCC Rcd 10782 (2009).
^ An FCC Form 159 and detailed instructions for completing the form may be
obtained at http://www.fcc.gov/Forms/Form159/159.pdf.
^ Questions regarding payment procedures, it should contact the Financial
Operations Group Help Desk by phone at 1-877-480-3201, or by e-mail at
[7]ARINQUIRIES@fcc.gov.
^ Equal Access to Justice Act, Pub L. No. 96-481, 94 Stat. 2325 (1980)
(codified at 5 U.S.C. S 504); see also 47 C.F.R. SS 1.1501-1.1530.
Federal Communications Commission DA 13-684
2
References
Visible links
1. mailto:Terry.Cavanaugh@fcc.gov
2. mailto:Brian.Carter@fcc.gov
3. mailto:Brian.Carter@fcc.gov
4. mailto:Terry.Cavanaugh@fcc.gov
5. mailto:Brian.Carter@fcc.gov
6. mailto:ARINQUIRIES@fcc.gov
7. mailto:ARINQUIRIES@fcc.gov