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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
KNFL, Inc. ) File No. EB-99-
DV-025
Tremonton, Utah )
) NAL/Acct. No.
915DV0003
MEMORANDUM OPINION AND ORDER
Adopted: October 5, 2000 Released: October
10, 2000
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Memorandum Opinion and Order (``Order''), we
deny a petition for reconsideration filed on May 15, 2000, by
KNFL, Inc. (``KNFL''), licensee of Station KNFL(FM),
Tremonton, Utah. KNFL seeks reconsideration of a Forfeiture
Order1 which issued a monetary forfeiture against KNFL in the
amount of $16,000 for willful and repeated violation of
Section 301 of the Communications Act of 1934, as amended
(``Act'').2 The noted violation involves operation of a radio
station without a license. For the reasons discussed below,
we affirm the $16,000 monetary forfeiture.
II. BACKGROUND
2. On October 21, 1998, the FCC's Denver, Colorado, Field
Office (``Denver Office'') received information indicating
that an unauthorized FM translator station operating on
frequency 105.1 MHz was rebroadcasting the signal of KNFL(FM),
which is authorized to transmit on frequency 104.9 MHz. On
the same day, an FCC agent from the Denver Office contacted
KNFL(FM)'s general manager, Morgan Skinner, by telephone.
Morgan Skinner admitted that the KNFL(FM) signal was being
rebroadcast by an FM translator station operating on 105.1
MHz. In response to the agent's request for further
information about the translator station, Morgan Skinner sent
the Denver Office a letter dated October 21, 1998. In that
letter, Morgan Skinner admitted that ``KNFL [Inc.] purchased
the translator, antenna and coaxial cable and had it
installed.'' On November 12, 1998, an agent from the Denver
Office informed Morgan Skinner by telephone that his letter
contained no information establishing KNFL's authority to
operate an FM translator on 105.1 MHz, and warned him that he
must cease operation of the FM translator station unless he
provided evidence of an authorization. Morgan Skinner stated
that he would contact his attorney and have the appropriate
information faxed to the agent, but the agent never received
any such information.
3. On March 16, 1999, agents from the Denver Office
detected an FM translator station on 105.1 MHz in Logan, Utah,
which was rebroadcasting the signal of KNFL(FM). The agents
went to the main studio for KNFL(FM) in Logan, Utah, where
Steve Skinner (Morgan Skinner's brother) was in charge of the
station's operation. Steve Skinner admitted that KNFL was
operating an FM translator station on 105.1 MHz. At the
request of the agents, Steve Skinner terminated the FM
translator's operation.
4. On July 2, 1999, the District Director of the Denver
Office issued a Notice of Apparent Liability (``NAL'') to KNFL
in the amount of $16,000 for the unauthorized operation of the
FM translator station in repeated and willful violation of
Section 301 of the Act.3 In its response to the NAL, KNFL
admitted that it had operated an FM translator station in the
Logan, Utah, area on 105.1 MHz without Commission
authorization, but presented several arguments for
cancellation or reduction of the proposed forfeiture. In the
Forfeiture Order, we agreed with KNFL's argument that the base
amount used for calculation of the proposed forfeiture should
have been $10,000 rather than $11,000. However, we concluded
that KNFL's egregious conduct in continuing to operate an
unauthorized FM translator station after receiving a specific
warning from the Commission fully justified increasing the
forfeiture from the base amount of $10,000 to $16,000. In
addition, we concluded (1) that it was irrelevant whether KFNL
had requested an authorization to operate the FM translator
since the mere filing of an application does not constitute
authority to operate; (2) that it was irrelevant whether the
FM translator's signal had extended beyond KNFL(FM)'s
protected contour; (3) that KNFL's violation could not be
considered ``minor'' in view of its extended duration and
continuance after a warning; (4) that nothing in the record
justified a reduction of the proposed forfeiture based on good
faith or voluntary disclosure or a history of overall
compliance; and (5) that we could not establish the
reliability of the 1996, 1997 and 1998 financial statements
submitted by KNFL in support of its inability to pay argument
because the statements were unaudited and did not include a
certification as to their correctness.
III. DISCUSSION
5. In its petition for reconsideration, KNFL argues that
the $16,000 forfeiture should be reduced due to its inability
to pay. In support of this argument, KNFL provides tax
returns for 1997 and 1998. Both the NAL and the Forfeiture
Order informed KNFL that claims of inability to pay should be
supported by tax returns or other financial statements
prepared under generally accepted accounting procedures for
the most recent three-year period.4 See Barry A. Stevenson,
12 FCC Rcd 1976, 1977 (Compl. & Inf. Bur. 1997); Morradio
Inc., 14 FCC Rcd at 5201, 5203-04 (Compl. & Inf. Bur. 1999).
KNFL did not provide a tax return or any other financial
information for the most recent year, 1999. KNFL's 1998 tax
return covers only the first three months of 1998. 5 We are
unable to accurately assess KNFL's ability to pay the
forfeiture on the basis of a three-month tax return.
According to KNFL's 1997 tax return, KNFL had no income in
1997. However, the 1997 financial statement previously
provided by KNFL with its response to the NAL showed that KNFL
earned gross revenues of $80,888 in 1997.6 Without an
explanation for this apparent discrepancy, we cannot consider
KNFL's 1997 tax return. In sum, we cannot determine based on
the information provided by KNFL that KNFL is unable to pay
the forfeiture.7
6. KNFL also argues that it qualifies for a reduction in
the forfeiture under the downward adjustment factors for minor
violation, history of overall compliance and good faith or
voluntary disclosure set forth in the Commission's forfeiture
guidelines. KNFL's argument regarding its history of overall
compliance is the only argument that warrants further comment
here. Legacy Communications, Inc., which owns 100% of the
stock of KNFL, also owns 100% of the stock of KEOT, Inc., the
licensee of KEOT(FM), St. George, Utah, and KGNT, Inc., the
licensee of KGNT(FM), Smithfield, Utah.8 Both of these
licensees recently engaged in an unauthorized transfer of
substantial control. KEOT, Inc., 15 FCC Rcd 2710 (Enf. Bur.
2000); KGNT, Inc., 15 FCC Rcd 5806 (Enf. Bur. 2000).
Considering these other violations, which the licensees have
admitted, we do not believe that KNFL is entitled to any
reduction of the forfeiture amount based on its history of
overall compliance. KNFL's remaining arguments were fully
considered and rejected in the Forfeiture Order.9 Thus, we
find no basis for modifying the Forfeiture Order.
IV. ORDERING CLAUSES
7. ACCORDINGLY, IT IS ORDERED that, pursuant to Section
405 of the Act10 and Section 1.106 of the Rules,11 KNFL,
Inc.'s petition for reconsideration IS DENIED.
8. Payment of the forfeiture shall be made in the manner
provided for in Section 1.80 of the Rules12 within thirty (30)
days of the release of this Order. If the forfeiture is not
paid within the specified period, the case may be referred to
the Department of Justice for collection pursuant to Section
504(a) of the Act.13 Payment may be made by credit card
through the Commission's Credit and Debt Management Center at
(202) 418-1995 or by mailing a check or similar instrument,
payable to the order of the ``Federal Communications
Commission,'' to the Federal Communications Commission, P.O.
Box 73482, Chicago, Illinois 60673-7482. The payment should
note the NAL/Acct. No. 915DV0003. Requests for full payment
under an installment plan should be sent to: Chief, Credit
and Debt Management Center, 445 12th Street, S.W., Washington,
D.C. 20554.
9. IT IS FURTHER ORDERED that a copy of this Order shall
be sent by certified mail, return receipt requested, to
counsel for KNFL, Inc., Dan J. Alpert, 2120 N. 21st Road,
Suite 400, Arlington, Virginia 22201.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 KNFL, Inc., 15 FCC Rcd 10286 (Enf. Bur. 2000).
2 47 U.S.C. § 301.
3 Notice of Apparent Liability for Forfeiture, NAL Acct. No.
915DV0003 (Compl. & Inf. Bur., Denver Office, released July 2,
1999).
4 NAL at note 3; KNFL, Inc., 15 FCC Rcd at 10289.
5 KNFL states that its 1998 tax return covers only the first
three months of 1998 because KNFL changed its status from an ``S-
Corporation'' to a ``C-Corporation'' effective April 1, 1998.
KNFL further states that it had requested an extension of time to
file a tax return as a ``C-Corporation'' for the nine month
period of April 1, 1998 to December 31, 1998, and that it
anticipated filing a tax return for this nine month period in
June 2000. Although KNFL indicated that it would provide
additional tax information as it becomes available, it did not
submit any additional tax information to the Commission.
6 KNFL, Inc., 15 FCC Rcd at 10288.
7 We also note that the tax returns provided by KNFL are
neither signed nor dated.
8 Lavon Randall and the Bear River Trust, the sole beneficiary
of which is Morgan Skinner, each own approximately 48% of the
stock of Legacy Communications, Inc.
9 KNFL, Inc., 15 FCC Rcd at 10289.
10 47 U.S.C. § 405.
11 47 C.F.R. § 1.106.
12 47 C.F.R. § 1.80.
13 47 U.S.C. § 504(a).