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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 IN REPLY REFER TO: 1800C1-SB 95020328 95020275 94120161 Released: January 28, 1997 CERTIFIED MAIL RETURN RECEIPT REQUESTED Western Slope Communications, LTD. Licensee, Station K27CO (TV), Grand Junction, CO 1625 Broadway Suite 1600 Denver, CO 80202 Mr. W. Russell Withers, Jr., Licensee Station KREX-TV, Grand Junction, CO P.O. Box 789 Grand Junction, CO 81502 Dear Licensees: This letter constitutes a Notice of Apparent Liability for forfeitures pursuant to Section 503(b) of the Communications Act of 1934, as amended, under authority delegated to the Chief, Mass Media Bureau by Section 0.283 of the Commission's Rules, for violation of Section 310(d) of the Communications Act of 1934, as amended, and Section 73.3540 of the Commission's Rules. These provisions prohibit the transfer of control of a broadcast station without prior Commission consent. On January 4, 1995, and December 8, 1995, we sent letters of inquiry to Western Slope Communications, Ltd. (WSC) and to W. Russell Withers, Jr., (Withers) respectively, concerning an alleged unauthorized transfer of control of Station K27CO, Grand Junction, Colorado. Specifically, our letters sought to clarify Withers' role in the station's operation. WSC's response of February 16, 1995, and Withers' response of February 9, 1996, reveal the following sequence of events: On March 7, 1984, the Commission accepted an application from WSC for a new low power television station at Grand Junction, Colorado. WSC was announced as the tentative selectee for Channel 27 in Grand Junction in February 1988. Meanwhile, in June 1984, WSC filed for bankruptcy in the United States Bankruptcy Court for the District of Colorado. In March of 1989, the Bankruptcy Court discharged WSC from bankruptcy under a Plan of Reorganization that included an Agreement between WSC and Withers (the "K27CO Agreement") concerning the construction and operation of the low power television station. WSC notified the Commission of its discharge, and on July 9, 1991, was granted a construction permit. Also in 1989, Thomas F. Quinn, who had been retained by WSC as its bankruptcy counsel, assumed the duties of de facto managing agent for WSC. Under the K27CO Agreement, Withers constructed the station at his own expense, locating its transmitter and main studio at sites that he owned. He also maintains control over all aspects of station operation, including financial arrangements, personnel decisions, station policy and programming. While you claim that Withers' actions are "subject to Western Slope's ultimate direction and control," we cannot identify, nor do you provide evidence of, significant responsibilities actually retained or performed by WSC. Indeed, Mr. Thomas F. Quinn, as WSC's de facto managing agent, has specifically declared that his activities "have been primarily limited to the collection and deposit of amounts paid by Withers pursuant to the K27CO Agreement, execution of income tax returns for WSC, and the execution of documents, including FCC applications, necessary to preserve the low power television licenses." It appears, therefore, that from approximately July 9, 1991, when the construction permit was issued, until the present, Western Slope Communications, Ltd., permittee of Station K27CO, Grand Junction, Colorado and W. Russell Withers, Jr., licensee of Station KREX-TV, Grand Junction, Colorado, violated Section 310(d) of the Communications Act of 1934 as amended, and Section 73.3540 of the Commission's Rules, by transferring and assuming control, respectively, of Station K27CO without Commission authorization to do so. Accordingly, pursuant to Section 503(b) of the Communications Act of 1934, as amended, Western Slope Communications, Ltd. and W. Russell Withers, Jr., are hereby advised of their apparent liability for forfeitures of five thousand dollars ($5,000) each for their apparent willful and repeated violations of Section 310(d) of the Communications Act and Section 73.3540 of the Commission's Rules. In assessing these forfeitures, we have undertaken to apply directly the statutory factors in 47 U.S.C Section 503(b)(2), including "the nature, extent and gravity of the violation." We have also reviewed similar cases. See, e.g., Brooke Communications, Inc., 10 FCC Rcd 8249 (1995), FM Broadcasters of Douglas County, 10 FCC Rcd 8254 (1995). Finally, we have taken into account that the forfeitures assessed in the cited cases involved violations by full powered facilities, which are likely to generate revenues far greater than K27CO as a low power television station. In regard to this forfeiture proceeding, Western Slope Communications, Ltd. and W. Russell Withers, Jr. are each afforded a period of thirty (30) days from the date of this letter "to show, in writing, why a forfeiture penalty should not be imposed or should be reduced, or to pay the forfeiture. Any showing as to why the forfeiture should not be imposed or should be reduced shall include a detailed factual statement and such documentation and affidavits as may be pertinent." 47 C.F.R.  1.80(f)(3). Other relevant provisions of Section 1.80 of the Commissions Rules are summarized in the attachment to this letter. As noted previously, Thomas F. Quinn, has been acting as de facto managing agent of WSC since 1989. The information now before us raises questions as to the viability of WSC as a functioning legal entity, and as to Quinn's authority to act for it in connection with our processes. Up until now, we have accepted his submissions without question. While we do not believe it necessary or appropriate to revisit our earlier acceptances, we cannot continue our practice without further clarification. We accordingly direct Western Slope Communications to, within thirty days of the date of this letter, file a statement documenting and clarifying its legal status, ownership and control. This statement should also detail steps it will take to come into compliance with the Commission's Rules, by placing control of the station in the hands of its licensee of record. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau Attachment