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FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
In the Matter of )
Bay Broadcasting Corporation ) NAL Acct. No.
Licensee, KHSN(AM) )
Coos Bay, Oregon )
Facility ID # 4082 )
Former Licensee, KACW(FM) )
North Bend, Oregon )
Facility ID # 5210 )
Former Licensee, KBBR(AM) )
North Bend, Oregon )
Facility ID # 5212 )
Former Licensee, KOOS(FM) )
North Bend, Oregon )
Facility ID # 4080 )
Former Licensee, K299AA )
North Bend/Coos Bay, Oregon )
Facility ID # 5211 )
Adopted: April 26, 2000 Released: April
By the Chief, Enforcement Bureau:
1. This Forfeiture Order (``Order'') imposes a
forfeiture against Bay Broadcasting Corporation (``Bay'') in
the amount of nineteen thousand dollars ($19,000). We
conclude that Bay willfully and repeatedly violated Section
301 of the Communications Act of 1934, as amended (the
``Act''), and Sections 73.1201, 73.1675, 73.1690 and 74.1251
of the Commission's rules.1 The violations include:
operation without Commission authorization of studio-
transmitter links (``STL'') for stations KHSN(AM), Coos Bay,
and KACW(FM) and KBBR(AM), both in North Bend, all in
Oregon; failure to broadcast required station identification
announcements on Station KHSN(AM); use without Commission
authorization of a long wire antenna for KHSN(AM);
relocation without Commission authorization of the
transmitter and transmitter line for KHSN(AM) and of FM
translator station K299AA.
2. Following receipt of a complaint from Robert King,
a former employee of Bay, the resident agent of the
Commission's Portland Field Office conducted an inspection
of the captioned stations. The inspection disclosed
numerous violations of the rules, including: those noted
above; failure to make appropriate entries in station
records concerning EAS required weekly and monthly tests (47
C.F.R. § 11.61(b)); reliance on an inoperable telephone
dial-up remote control for KHSN(AM) (47 C.F.R. §
73.1350(c)); and failure to post antenna registration
numbers at the towers for KACW(FM) and KBBR(AM) (47 C.F.R. §
17.4). Following issuance of a Notice of Violation
(``NOV'') on April 21, 1999, and review of the licensee's
response, the Portland Field Office, on August 24, 1999,
issued a Notice of Apparent Liability (``NAL'') to Bay,
which proposed a forfeiture of $19,000. The NAL cited the
violations noted in paragraph one of this Order.
3. In response to the NAL,2 Bay concedes the
occurrence of the violations. Nevertheless, Bay requests a
substantial reduction in the forfeiture. Bay believes that
its prior record, small business status, presence in a small
market, and inability to pay the proposed forfeiture without
substantial hardship warrant reduction of the forfeiture.
4. Section 503(b)(2)(D) of the Act directs us to
consider two distinct matters in determining the appropriate
amount of a forfeiture.3 First, as to the violations, we
must take into account their nature, circumstances, extent,
and gravity. Second, with respect to the violator, we must
consider the degree of culpability, history of prior
offenses, ability to pay, and such other matters as justice
5. The record before us reflects that Bay relocated
two transmitters and operated three others without
Commission authorization. The unauthorized moves and/or
operations began at various times between July 1997 and
August 1998. Bay also violated the terms of its license for
KHSN(AM) by using an unauthorized antenna beginning in July
1997. Bay acknowledges that the violations occurred largely
because it sought to save money by taking the actions noted.
Bay claims it was going to seek Commission approval at a
later undetermined time; however, it did not do so until
after it received the NOV. Moreover, even subsequent to the
issuance of the NOV, Bay continued to operate all of the
referenced transmitters, and, in the case of KHSN(AM), used
the unauthorized antenna up to the dates when either
Commission authorization occurred or, in the case of Station
K299AA, the violation was corrected.4 As for the failure to
broadcast station identification announcements on KHSN(AM)
over a two-day period, Bay indicates that the violations
occurred because it did not adequately monitor a
malfunctioning software computer system that was supposed to
insert commercials as well as station identifications.
6. After considering the above, we conclude that all
of the violations were willful and repeated. In this
regard, the term ``willful'' means that the violator knew
that it was taking the action in question, irrespective of
any intent to violate the Commission's rules,5 while
``repeated'' means more than once.6 In addition, we find
that the unauthorized moves and use of the unauthorized
antenna were not only continuous but also intentional in
that those violations continued even after Bay knew that its
operations were at variance with the Act, the Commission's
rules, and its licenses.7 In this regard, it bears
repeating that a licensee cannot legally engage in the
activity that it wishes the Commission to authorize until it
receives approval to do so.8
7. In mitigation, we note that, prior to the
violations cited in the NAL, Bay and its sole owner,
Laurence Goodman, had a history of overall compliance,
dating back to December 1989. Further, it appears that Bay's
stations are licensed to relatively small-market
communities, a factor that has served as a basis for
reducing a proposed forfeiture.9 However, we believe the
nature, circumstances, extent and gravity of the violations,
as described above, and the culpability of Bay more than
offset any mitigation that would be appropriate for these
8. Bay argues that additional mitigation is warranted
in light of its status as a ``small business,'' pursuant to
the Small Business Regulatory Enforcement Fairness Act of
1996 (``SBREFA'').10 We disagree. A radio broadcasting
entity qualifies as a ``small business'' if its annual
receipts are less than five million dollars. 13 C.F.R. §
121.201 (Major Group 48, SIC Code 4832). Annual receipts
for businesses more than three years old are determined by
totaling the entity's gross income for the three most recent
fiscal years and dividing by three. 13 C.F.R. § 121.104.
Bay's federal income tax returns for 1996-1998 demonstrate
that it should be considered a ``small business.''
Notwithstanding such status, however, Bay is not entitled to
a reduction of the proposed forfeiture. The Commission has
previously indicated that Section 503(b) of the Act11 and
the Commission's policies and precedent, as supplemented by
the Forfeiture Policy Statement, comply with SBREFA.12 We find
no basis for reduction of the forfeiture based on these
policies and precedents. The discovery of Bay's violations
was unrelated to its participation in a compliance
assistance or audit program, and Bay's subsequent actions do
not warrant a conclusion that Bay undertook good faith
efforts to comply with the law. In this regard, Bay
continued to operate its unauthorized facilities during the
pendency of its applications for licenses and its STA
request. Considering such operations and the circumstances
that led Bay to violate the Act and rules in the first
instance (see para. 5, supra), we conclude that its
violations were willful, which militates against reduction
or cancellation of the proposed forfeiture.13 See
Forfeiture Policy Statement, supra note 3, 12 FCC Rcd at
17109. Also, as discussed infra, we conclude that Bay has
the ability to pay the proposed forfeiture. Accordingly, a
reduction of the forfeiture because of Bay's status as a
small business is not warranted.
9. Finally, Bay contends that it is unable to pay a
$19,000 forfeiture, notwithstanding its sale of KACW(FM),
KBBR(AM), KOOS(FM) and K299AA, and the impending sale of
KHSN(AM). Again, we disagree. Our analysis of Bay's
financial condition leads us to conclude that, even prior to
the sale of KHSN(AM), Bay has the wherewithal to pay the
proposed forfeiture. In this regard, Commission records
reflect that the sale of Bay's stations, except KHSN(AM),
was consummated on September 24, 1999. According to Bay, it
received $475,000 in cash, which was reduced immediately by
payments of $382,364 to creditors. Bay's alleged remaining
debts, which include $150,000 in current and anticipated
expenses and a note payable of $107,000 appear to be covered
by cash on hand plus a note receivable of $375,000 from the
buyer of Bay's former stations. Moreover, once the sale of
KHSN(AM) is consummated, Bay will have additional resources
which appear more than sufficient to retire any existing
debt, including the forfeiture.14 The cases cited by Bay,
both of which involved a reduction in a proposed forfeiture,
are inapposite.15 Unlike the licensees therein, Bay is
capable of paying the forfeiture. Moreover, as discussed
above, Bay continued to operate illegally long after it had
been explicitly advised that its operations regarding the
STLs, KHSN(AM) and K299AA were unauthorized.
10. After taking all of the foregoing into account, we
conclude that the recommended $19,000 forfeiture should not
be reduced. The seriousness and duration of Bay's
violations, when coupled with its culpability, offset Bay's
overall history and market situation. Further, neither
Bay's small business status nor its asserted inability to
pay warrants reduction or cancellation of the forfeiture.
The forfeiture is appropriate and should be imposed.
11. Accordingly, IT IS ORDERED THAT, pursuant to
Section 503(b) of the Act16, and Sections 0.111, 0.311 and
1.80(f)(4) of the Commission's rules17, Bay Broadcasting
Corporation IS LIABLE FOR A MONETARY FORFEITURE in the
amount of nineteen thousand dollars ($19,000). The
forfeiture is imposed for willful and repeated violations of
Section 301 of the Act and Sections 73.1201, 73.1675,
73.1690 and 74.1251 of the Commission's rules.18 Among
other things, those provisions proscribe operation of
unlicensed transmitters; certain modifications to
transmission systems without prior Commission approval; and
omission of station identification announcements.
12. Payment of the forfeiture shall be made in the
manner provided for in Section 1.80 of the Commission's
rules19 within 30 days of the release of this 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.20 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 No. referenced above
(915PO0001). 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. 20554.21
13. IT IS FURTHER ORDERED that copies of this
Forfeiture Order shall be sent by Certified Mail Return
Receipt Requested to Bay Broadcasting Corporation at P.O.
Box 180, Coos Bay, Oregon 97420 and to its counsel, Howard
J. Braun, Esq. at Rosenman & Colin, LLP, 805 15th Street,
N.W., 9th Floor, Washington, D.C. 20005-2212.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
1 47 U.S.C. § 301; 47 C.F.R. §§ 73.1201, 73.1675, 73.1690,
2 Bay submitted its response on September 30, 1999 and
supplemented it on October 6, 1999, and March 10, 2000.
47 U.S.C. § 503(b)(2)(D). See also In the Matter of the
Commission's Forfeiture Policy Statement and Amendment of
Section 1.80 of the Rules to Incorporate the Forfeiture
Guidelines, 12 FCC Rcd 17087, 17100-01 (1997), recon.
denied, 15 FCC Rcd 303 (1999) (``Forfeiture Policy
The Commission granted Bay's STL applications for
KACW(FM), KBBR(AM) and KHSN(AM) on June 30, 1999. Bay
relocated the transmitter for K299AA to its licensed site on
July 27, 1999. Finally, although Bay, by letter dated June
15, 1999, sought special temporary authorization (``STA'')
for KHSN(AM)'s relocation and long wire antenna, STA was not
granted by the Mass Media Bureau until April 5, 2000.
See Jerry Szoka, 14 FCC Rcd 9857, 9865 (1999); Southern
California Broadcasting Co., 6 FCC Rcd 4387 (1991).
See Hale Broadcasting Corp., 79 FCC 2d 169, 171 (1980).
See Supervalu, Inc., DA 00-235 (Enf. Bur., released
February 9, 2000).
See SouthEast Telephone Inc., DA 00-325 (Enf. Bur.,
released February 22, 2000); Andres Santos, 14 FCC Rcd 6192,
6194-95 (Compl. & Inf. Bur. 1999).
See, e.g., Benito Rish, 10 FCC Rcd 2861, 2862 (1995),
where the Commission reduced a forfeiture from $10,000 to
$2,500 in large part because the station in question was a
5,000 watt daytime-only station in a community of 425,
thereby suggesting an inherently low station value.
Pub. L. 104-121, 110 Stat. 858 (1996).
47 U.S.C. § 503(b).
See Forfeiture Policy Statement, supra note 3, 12 FCC Rcd
Citing Bronco Broadcasting Co., Inc., 13 FCC Rcd 9422
(Comp. & Inf. Bur. 1999), Bay argues that its small business
status, standing alone, should warrant reduction of the
forfeiture. We disagree. As we have discussed above,
application of the Communications Act and Commission policy
and precedent, which reflect SBREFA, to Bay and its actions
does not justify or require a reduction of its forfeiture.
According to records supplied by Bay, it is contracted to
receive $150,000 for the sale of KHSN(AM), consisting of
$25,000 cash at closing and a note receivable of $125,000.
See Eddie Bond, 13 FCC Rcd 12526 (Mass Media Bur. 1998),
recon. granted 14 FCC Rcd 5070 (Mass Media Bur. 1999)
(reduction of forfeiture from $15,000 to $5,000 to $1,500
based on showing that former licensee had a ``limited, fixed
income''); and Gureckis, Michael A., 13 FCC Rcd 21757
(Compl. & Inf. Bur. 1998) (following review of documents
related to its ability to pay and the results of two
inspections subsequent to the NAL, which demonstrated that
``considerable expenditures'' had been made to come into
compliance, a proposed forfeiture was reduced from $8,500 to
$1,500). Bay also cites Morradio, Inc., 14 FCC Rcd 5201
(Compl. & Inf. Bur. 1999) and contends that although the
proposed forfeiture of $4,000 for an unauthorized
transmitter move was not reduced, forfeitures for other
apparent violations were not proposed. Although Bay
suggests that the Bureau's decision in Morradio not to
propose forfeitures for all possible violations should be
followed here, we note that the NAL issued to Bay did not
include all of the violations uncovered during the
inspection and referenced in the NOV. Consequently, we
perceive no reason to reduce Bay's forfeiture because of
47 U.S.C. § 503(b).
47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).
47 U.S.C. § 301; 47 C.F.R. §§ 73.1201, 73.1675, 73.1690,
47 C.F.R. § 1.80.
47 U.S.C. § 504(a).
See 47 C.F.R. § 1.1914.