******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of) Liability of ) ) KCIT ACQUISITION COMPANY ) Licensee of Television Station ) KCIT(TV), Amarillo, Texas ) and ) BSP BROADCASTING, INC.) Licensee of Television Station ) KJTL-TV, Wichita Falls, Texas ) ) for Forfeitures ) MEMORANDUM OPINION AND ORDER Adopted: December 8, 1997 Released: December 11, 1997 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. 503(b), under authority delegated by Section 0.283 of the Commission's Rules, 47 C.F.R. 0.283, has before it for consideration (i) a Notice of Apparent Liability ("NAL") in the amount of fifteen thousand dollars ($15,000) issued against KCIT Acquisition Company ("KCIT Company"), licensee of station KCIT(TV), Amarillo, Texas; (ii) an NAL in the amount of fifteen thousand dollars ($15,000) issued against BSP Broadcasting, Inc. ("BSP"), licensee of station KJTL-TV, Wichita Falls, Texas; and (iii) requests for reduction of the forfeitures filed by BSP and KCIT Company on May 9, 1994. The forfeitures were assessed for apparent repeated violation of Section 73.670 of the Commission's Rules, 47 C.F.R. 73.670, which limits the amount of commercial matter that may be aired during children's programming. 2. On April 1, 1993, KCIT Company filed an application for renewal of license for KCIT(TV), File No. BRCT-9304018K, indicating full compliance with the children's television commercial limits. However, in an amendment to that renewal application filed on October 28, 1993, KCIT Company revealed that from January through October, 1992, KCIT(TV) exceeded the children's television commercial limits on 75 occasions. Nine of the commercial overages were 90 seconds in duration; 13 were 60 seconds in duration; 52 were 30 seconds in duration; and one was 30 seconds in duration. In its explanation of these commercial overages, KCIT Company indicated that, although the station had formatted its children's programming to comply with the commercial limits, overages still occurred. The licensee stated that some of the overages were caused by last-minute "make goods" or by commercial schedule changes made after the station's "preemption report" had been prepared. In addition, KCIT Company asserted that the station did not realize until later that promotional spots contained references to program sponsors. Finally, the licensee stated that the overages occurred soon after the commercial limits went into effect; that the station has a one-person traffic department; and that the station had adopted procedures to assure future compliance. 3. Also on April 1, 1993, BSP filed an application for renewal of license for KJTL-TV, File No. BRCT-930401KY, again indicating full compliance with the children's television commercial limits. In an amendment to the KJTL-TV renewal application filed on October 28, 1993, BSP revealed that from January through October, 1992, KJTL-TV exceeded the children's television commercial limits on 70 occasions. Fourteen of the commercial overages were 60 seconds in duration, and 56 were 30 seconds in duration. The explanation for the overages provided by BSP was the same as the explanation provided by KCIT Company. 4. In KCIT NAL, supra, and BSP NAL, supra, the Chief of the Mass Media Bureau, pursuant to delegated authority, considered the following "factors of particular importance": the number and duration of commercial overages, the period of time over which the overages occurred, and whether the licensee had established an effective program to ensure compliance with the children's television commercial limitations. Upon consideration of these factors, it was determined that a forfeiture in the amount of $15,000 was appropriate for each station. KCIT NAL, supra 9 FCC Rcd at 1827-28; BSP NAL, supra 9 FCC Rcd at 1829-30. 5. In their requests for reduction of forfeitures KCIT Company and BSP do not dispute the facts concerning the nature and extent of children's television commercial overages reported in the renewal applications, as amended. However, they contend that the forfeitures should be reduced based upon two of the "Downward Adjustment Criteria" established in Policy Statement, Standards for Assessing Forfeitures, 6 FCC Rcd 4695 (1991), recon. denied, 7 FCC Rcd 5339 (1992), revised, 8 FCC Rcd 6215, 6220 (1993)("Policy Statement/Assessing Forfeitures"), specifically (i) good faith or voluntary disclosure and (ii) history of overall compliance with Commission rules. KCIT Company and BSP each assert that they voluntarily reported the violations to the Commission, and that they had an unblemished record as FCC licenses. Discussion 6. In United States Telephone Ass'n. v. FCC, 28 F3rd 1232 (D.C. Cir. 1994), the U.S. Court of Appeals for the District of Columbia set aside Policy Statement/Assessing Forfeitures, supra, stating that the guidelines for assessing forfeitures established therein must be subject to public comment to comply with the Administrative Procedure Act. In accordance with the court's decision, the Commission released Forfeiture Guidelines - Notice of Proposed Rulemaking in CI Docket No. 95-6, 10 FCC Rcd 2945 (1995). After receiving and considering comments from the public in that proceeding, the Commission adopted guidelines for assessing forfeitures. Forfeiture Guidelines - Report and Order in CI Docket No. 95-6, FCC Rcd (FCC 97-218, adopted June 19, 1997, released July 28, 1997)("Forfeiture Guidelines"). Forfeiture Guidelines, id., became effective on October 14, 1997. 62 Fed. Reg. 43474 (August 14, 1997). However, with regard to (i) all cases pending when Forfeiture Guidelines, supra, was adopted, and (ii) all cases involving "violations arising from facts that occurred before the effective date of th[at] order", forfeiture amounts are to be assessed "under the case-by-case approach in effect when the violation occurred", in conformity with the standards set out in Section 503 of the Communications Act. Id. at 49. 7. In KCIT NAL, supra 9 FCC Rcd at 1827, and BSP NAL, supra 9 FCC Rcd at 1829, the Commission specifically recognized that a petition for review of Policy Statement/Assessing Forfeitures, supra, was pending in the court of appeals, and stated that the assessed forfeiture amounts of $15,000, respectively, were determined after consideration of the factors specified in Section 503(b)(2) of the Communications Act and in Policy Statement/Assessing Forfeitures, supra. As stated above, in determining the forfeiture amount in the instant case the Commission considered the number and duration of commercial overages at KCIT(TV) and KJTL-TV, the period of time over which the overages occurred, and whether the licensee had established an effective program to ensure compliance with the children's television commercial limits. Id., 8 FCC Rcd at 5082. These criteria, which were developed and applied by the Commission in previous cases, are appropriate in analyzing violations of the children's television commercial limits, since they take into account, inter alia, "the nature, circumstances, extent, and gravity of the violation, and, with respect to the violator, the degree of culpability", as required under 503(b)(2)(D) of the Communications Act. Thus, as specified in Forfeiture Guidelines, supra at 49, the forfeiture amounts in the instant cases were determined in accordance with the criteria developed and applied by the Commission in previous cases, in conformity with the standards established in Section 503 of the Communications Act. 8. Voluntary Disclosure. Initially we note that in the Children's Television Act of 1990, Congress not only required the establishment of limits on the amount of commercial matter that may be included in children's television programming, but also directed that "the Commission shall, in its review of any application for renewal of a commercial...television broadcast license, consider the extent to which the licensee...has complied with such standards...." Pursuant to this Congressional mandate, the Commission added a supplement to FCC Form 303-S, Application for Renewal of License, directing the applicant to (i) state whether or not it had complied with the children's television commercial limits; and (ii) if it had not so complied, submit an exhibit to the renewal application listing "each segment of programming, 5 minutes or more in duration, designed for children 12 years old and under and broadcast during the license period which contained commercial matter in excess of the limits" (emphasis added), including "the length of the segment, the amount of commercial matter contained therein, and an explanation of why the limits were exceeded." Supplement to FCC Form 303-S, Application for Renewal of License, Question 9(b) and (c). Section 73.3514 of the Commission's Rules, 47 C.F.R. 73.3514, provides that "[e]ach application shall include all information called for by the particular form on which the application is required to be filed...." Section 1.17 of the Commission's Rules, 47 C.F.R. 1.17, provides that "[n]o licensee, permittee or applicant shall...in any application... submitted to the Commission, make any material misrepresentation or willful material omission bearing on any matter within the jurisdiction of the Commission." 9. Failure to provide the information called for in the renewal applications, or providing incomplete or incorrect information, could have resulted in additional forfeitures against KCIT Company and/or BSP for violation of Section 1.17 of the Rules. Cf., David A. Ringer, 8 FCC Rcd 7037 (1993). Further, failure to disclose the occurrence of violations of the children's television commercial limitations in response to the questions in the renewal application, or providing incomplete or incorrect information, could constitute a misrepresentation or lack of candor by an applicant, which would raise a serious question as to whether the applicant possesses the character qualifications to be a Commission licensee. Policy Regarding Character Qualifications in Broadcast Licensing, 102 FCC 2d 1179, 1210-11, recon. 1 FCC Rcd 421, 422 (1986)("Character Qualifications"), appeal dismissed sub nom. National Association for Better Broadcasting v. F.C.C., No. 86-1179 (D.C. Cir. June 11, 1987). Applicants for renewal of license have been disqualified on the basis of such character issues, resulting in denial of renewal. Character Qualifications/recon., 1 FCC Rcd at 422. Finally, as each applicant is reminded by a statement directly under the signature block on the FCC Form 303-S renewal application, willful false statements in the renewal application are punishable by fine and imprisonment, pursuant to U.S. Code, Title 18, Section 1001. In view of the foregoing, KCIT Company's and BSP's provision of information regarding the nature and extent of the respective stations' noncompliance with the children's television commercial limits cannot be said to have been "voluntary." 10. History of Overall Compliance. Section 503(b)(2)(D) of the Communications Act also provides that, in determining the appropriate amount of a forfeiture, the Commission shall take into account the licensee's history of prior offenses. Although KCIT Company and BSP assert that their respective records of compliance with the Commission rules are "unblemished", we do not believe that, under the facts and circumstances of the instant cases, the licensees' overall history of compliance with the Commission's rules necessitates or justifies a reduction of the specified forfeiture amounts. Initially, we note that, as stated in both NAL's, both stations apparently had no program or procedures in place to monitor compliance with the children's television commercial limits because, although the stations had been in violation of the children's television commercial limits over a period of ten months from January through October, 1992, they were unaware of the violations at the time that their renewal applications were filed on April 1, 1993. KCIT NAL, supra 9 FCC Rcd at 1828; BSP NAL, supra 9 FCC Rcd at 1830. This demonstrates a serious failure on the part of the respective licensee entities, which were controlled by the same individual, to ensure that the respective stations' management personnel (i) were aware of the children's television commercial limitations and (ii) had established procedures to ensure compliance with those limitations. We believe that two separate but related serious failures of licensee responsibility with regard to the children's television commercial limits vitiate any mitigating effect that might arise from the licensees' overall record of compliance with other Commission rules. Conclusion 11. The facts demonstrate a failure on the part of commonly-controlled KCIT Company and BSP to establish an effective program at KCIT(TV) and KJTL-TV to ensure compliance with the children's television commercial limits, clearly justifying the forfeitures in the amount of $15,000 assessed against each station. Nothing in the respective requests for reduction of forfeiture contradicts the facts or justifies or necessitates reduction or mitigation of the forfeiture amount. 12. Accordingly, IT IS ORDERED THAT the request for reduction of forfeiture filed by KCIT Acquisition Company IS DENIED. IT IS FURTHER ORDERED THAT, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. 503(b), KCIT Acquisition Company FORFEIT to the United States the sum of fifteen thousand dollars ($15,000) for repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R. 73.670. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. With regard to this forfeiture against KCIT(TV), KCIT Acquisition Company may take any of the actions set forth in Section 1.80 of the Commission's Rules, 47 C.F.R. 1.80, as summarized in the attachment to this Memorandum Opinion and Order. 13. IT IS FURTHER ORDERED THAT the request for reduction of forfeiture filed by BSP Broadcasting, Inc., IS DENIED. IT IS FURTHER ORDERED THAT, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. 503(b), BSP Broadcasting, Inc., FORFEIT to the United States the sum of fifteen thousand dollars ($15,000) for repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R. 73.670. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. With regard to this forfeiture against KJTL-TV, BSP Broadcasting, Inc., may take any of the actions set forth in Section 1.80 of the Commission's Rules, 47 C.F.R. 1.80, as summarized in the attachment to this Memorandum Opinion and Order. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau kcitjtl6.rel Addresses: KCIT Acquisition Company BSP Broadcasting, Inc. c/o Joseph A. Godles, Esq. Daniel S. Goldberg, Esq. Goldberg, Godles, Wiener & Wright 1229 Nineteenth Street, N.W. Washington, DC 20036 WBG License Company, L.L.C. Licensee, KCIT(TV) and KJTL-TV 405 Park Avenue Suite 702 New York, NY 10022 WBG License Company, L.L.C. Licensee, KCIT(TV) and KJTL-TV c/o Allan G. Moskowitz, Esq. Kaye, Scholer, Fierman, Hays & Handler The McPherson Building 901 Fifteenth Street, N.W. Suite 1100 Washington, D.C. 20005-2327 $// KCIT ACQSTN CO., KCIT(TV) (AMARILLO, TX) & BSP BCSTNG, INC., KJTL-TV (WICHITA FALLS, TX), DA 97-2569 //$ $/ 300.503(b) FORFEITURES (FORFEITURE ORDER) /$ $/ 73.670 COMMERCIAL LIMITS ON CHILDREN'S PROGRAMS /$