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

In the Matter of                        )
KNFL, Inc.                              )         File No. EB-99-

Tremonton, Utah                         )         
                                   )         NAL/Acct.        No. 


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, 

  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).