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                                   Before the

                       Federal Communications Commission

                             Washington, D.C. 20554


                                  )                               
     In the Matter of                                             
                                  )                               
     Frank Neely                      File No. EB-03-NF-014       
                                  )                               
     Licensee, Station WLTC(AM)       NAL/Acct. No. 200332640007  
                                  )                               
     Gastonia, North Carolina         FRN 0008-4986-68            
                                  )                               
     Rock Hill, North Carolina                                    
                                  )                               


                          MEMORANDUM OPINION AND ORDER

   Adopted: January 29, 2007  Released: January 31, 2007

   By the Assistant Chief, Enforcement Bureau:

   I. introduction

    1. In this Memorandum Opinion and Order ("Order"), we deny a Petition for
       Reconsideration filed by Frank Neely ("Mr. Neely"), licensee of AM
       broadcast station WLTC, Gastonia, North Carolina, of an Enforcement
       Bureau ("Bureau") Forfeiture Order which imposed a forfeiture of four
       thousand dollars ($4,000) to Mr. Neely for repeated violation of
       Section 73.1745(a) of the Commission's Rules ("Rules"). The noted
       violation involved Mr. Neely's operation of its broadcast station at
       unauthorized power levels.

   II. BACKGROUND

    2. In a July 16, 2003 Notice of Apparent Liability for Forfeiture, the
       Commission's Norfolk, Virginia Resident Agent Office ("Norfolk
       Office") issued a monetary forfeiture in the amount of $4,000 to Mr.
       Neely for apparent repeated violation of Section 73.1745(a) based on
       overpowered operations observed on April 22, 23, and 24, 2003. In his
       response to the NAL, Mr. Neely did not dispute that WLTC operated with
       excessive power on the dates specified in the NAL, but opposed the
       NAL, stating that he had set up procedures to prevent the reoccurrence
       of the violation, and that he had a history of overall compliance with
       the Commission's Rules. In addition, Mr. Neely claimed to be
       financially unable to pay the forfeiture. On August 23, 2004, the
       Bureau issued a Forfeiture Order finding Mr. Neely liable in the
       amount of $4,000 for repeated violation of Section 73.1745(a). In the
       Forfeiture Order, the Bureau found that Mr. Neely's corrective efforts
       were insufficient to nullify or mitigate the forfeiture, and that Mr.
       Neely did not have a history of compliance because of previous
       enforcement action taken against WLTC. Further, the Bureau found that
       the proposed forfeiture amount was a very small percentage of the
       gross revenues of Rejoice, Inc. ("Rejoice"), the parent company of
       WLTC, and held that no mitigation or reduction of the proposed
       forfeiture was warranted based on the financial information provided.

    3. On September 9, 2004, Mr. Neely filed a Petition for Reconsideration
       of the Forfeiture Order. He argues the single point that the financial
       information submitted with his response to the NAL supports his
       request for reduction or elimination of the forfeiture based on an
       inability to pay. The financial information provided is a set of tax
       returns for Rejoice. No financial information for Mr. Neely himself is
       provided.

    4. The forfeiture amount in this case was assessed in accordance with
       Section 503(b) of the Communications Act of 1934, as amended ("Act"),
       Section 1.80 of the Rules, and The Commission's Forfeiture Policy
       Statement and Amendment of Section 1.80 of the Rules to Incorporate
       the Forfeiture Guidelines,  ("Forfeiture Policy Statement"). In
       examining Mr. Neely's Petition for Reconsideration, Section 503(b) of
       the Act requires that the Commission take into account the nature,
       circumstances, extent and gravity of the violation and, with respect
       to the violator, the degree of culpability, any history of prior
       offenses, ability to pay, and such other matters as justice may
       require.

   III. DISCUSSION

    5. Under the Forfeiture Policy Statement and Section 1.80(b)(4) of the
       Rules, inability to pay is a downward adjustment factor for Section
       503 forfeitures. In analyzing economic-hardship claims, the Commission
       generally looks to a violator's gross revenues from the three most
       recent tax years as a reasonable and appropriate yardstick to
       determine its ability to pay an assessed forfeiture. Thus, the
       Commission will not consider reducing or canceling a forfeiture in
       response to a claim of inability to pay unless the petitioner submits
       (1) federal tax returns for the most recent three-year period; (2)
       financial statements prepared according to generally accepted
       accounting practices ("GAAP"); or (3) some other reliable and
       objective documentation that accurately reflects the petitioner's
       current financial status.

    6. In the Petition for Reconsideration, Mr. Neely argues that it is not
       appropriate to look at the "gross revenues" for Rejoice in assessing
       his ability to pay the forfeiture, but rather that the Bureau should
       consider that Rejoice has had a net operating loss after expenses. Mr.
       Neely argues that he was not paying himself a salary from the revenues
       of the company; he states that the provided tax returns show that the
       bulk of Rejoice's expenses are salaries, repairs and maintenance,
       rent, and taxes and licenses, which are expenses, he argues, that must
       be met to keep the business running.

    7. First, we note that Mr. Neely, the licensee of WLTC, and the person
       whom the Bureau found liable for the violations herein and the
       forfeiture, has not provided any financial information in support of
       his own individual inability to pay the forfeiture. Instead, Mr. Neely
       argues only that his company Rejoice has an inability to pay. That Mr.
       Neely receives no salary from Rejoice simply means that we must infer
       there are other sources for Mr. Neely's support. All of a violator's
       sources of revenue must be identified, and the requisite financial
       information regarding them provided, in order for us to consider a
       request to reduce a forfeiture for inability to pay. Accordingly, Mr.
       Neely has failed to make the requisite showing that he has an
       inability to pay the forfeiture.

    8. While we recognize that the financial information of Rejoice is
       relevant in analyzing Mr. Neely's ability to pay, however, standing
       alone, it is not conclusive in determining Mr. Neely's financial
       ability. Furthermore, considering the information on Rejoice in the
       light most favorable to Mr. Neely, we find that this information also
       does not demonstrate an inability to pay the forfeiture. In PJB
       Communications, the Commission stated that:

   [i]n general, a licensee's gross revenues are the best indicator of its
   ability to pay a forfeiture. Nevertheless, we recognize that in some
   cases, other financial indicators, such as net losses, may also be
   relevant. If gross revenues are sufficiently great, however, the mere fact
   that a business is operating at a loss does not by itself mean that it
   cannot afford to pay a forfeiture.

   In examining the relevant three years of Rejoice's financial information,
   we note that the gross revenues for Rejoice have increased each year.
   Moreover, in comparing the average gross revenues for the three year
   period to the $4,000 forfeiture, we note that the forfeiture amount
   represents a percentage significantly less than the threshold used to
   determine an inability to pay reduction. We therefore believe that the
   gross revenues are sufficiently great when compared to the forfeiture
   amount such that the mere fact that Rejoice may be experiencing an
   operating loss does not demonstrate that it cannot afford to pay the
   forfeiture. The Commission stated in Radio X Broadcasting Corporation
   that: "[i]n setting an appropriate forfeiture amount, we are guided by
   Congress's stated goal of imposing forfeitures that are `sufficiently high
   to deter violations and constitute a meaningful sanction.'" If a violator
   could escape meaningful sanctions for violations of the Rules by seeking
   an inability to pay reduction that is unsupported by its gross revenues,
   it would be in a position to undermine the remedial purpose of Section 503
   of the Act.

    9. Moreover, Mr. Neely has provided incomplete information concerning the
       nature of Rejoice's operating losses. Rejoice's financial information
       appears to be missing a number of schedules that would shed light on
       the specific assets and liabilities upon which Mr. Neely relies to
       show a net operating loss. Accordingly, we are unable to assess the
       precise nature of all of Rejoice's operating losses. We are able to
       observe from the information provided, however, that some of the
       operating losses include non-cash expenses of depreciation of, for
       example, more than $75,000 in 2003. Depreciation is not an actual
       expenditure which affects the licensee's cash availability in any
       negative way. Accordingly, a significant amount of Rejoice's operating
       losses are not relevant.

   10. The holding in First Greenville Corporation that Mr. Neely cites in
       his petition does not support his request for reduction of forfeiture.
       In that case, the Commission found that the sole shareholder of the
       licensee had loaned the violating station and its affiliates the funds
       to continue operating and that, without regard for depreciation, the
       stations' losses had generally exceeded their revenues. The petitioner
       in Greenville also was able to successfully argue that significant
       loss of service to the public would occur if it were found liable for
       the full amount of the proposed forfeiture because it was the sole
       service provider to its area.

   11. Likewise, the holding in Benito Rish does not support Mr. Neely's
       request for a reduction in forfeiture for inability to pay. The
       Commission noted in that case that the station was a daytime-only,
       directional station that served a community of 425, and that it was
       the only service to the area. These conditions of inherently low
       station value, in addition to the lack of its profitability, are the
       reasons the Commission reduced the forfeiture it assessed against the
       station. Mr. Neely has not argued or demonstrated similar qualities
       showing inherently low station value and that it is the sole radio
       resource to its service area.

   12. We have examined Mr. Neely's Petition for Reconsideration pursuant to
       the statutory factors above, and in conjunction with the Forfeiture
       Policy Statement. As a result of our review, we conclude that a
       reduction of the $4,000 forfeiture amount is not warranted and hereby
       affirm the Forfeiture Order.

   IV.  ORDERING CLAUSES

   13. Accordingly, IT IS ORDERED that, pursuant to Section 405 of the Act,
       and Section 1.106 of the Rules, the Petition for Reconsideration filed
       by Frank Neely, Licensee, Station WLTC(AM), IS DENIED,  and the
       Forfeiture Order finding Mr. Neely liable for a $4,000 forfeiture for
       repeated violation of Section 73.1745(a) of the Rules IS AFFIRMED.

   14. Payment of the forfeiture shall be made in the manner provided for in
       Section 1.80 of the Rules 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. Payment of the forfeiture must be made
       by check or similar instrument, payable to the order of the Federal
       Communications Commission. The payment must include the NAL/Acct. No.
       and FRN No. referenced above. Payment by check or money order may be
       mailed to Federal Communications Commission, P.O. Box 358340,
       Pittsburgh, PA 15251-8340. Payment by overnight mail may be sent to
       Mellon Bank /LB 358340, 500 Ross Street, Room 1540670, Pittsburgh, PA
       15251. Payment by wire transfer may be made to ABA Number 043000261,
       receiving bank Mellon Bank, and account number 911-6106. Requests for
       full payment under an installment plan should be sent to: Associate
       Managing Director - Financial Operations, 445 12th Street, SW, Room
       1A625, Washington, D.C. 20554.

   15. IT IS FURTHER ORDERED that a copy of this Memorandum Opinion and Order
       shall be sent by first class mail and certified mail return receipt
       requested to Mr. Frank Neely, 1286 Holland Road, Rock Hill, South
       Carolina 29732, and to his counsel David Tillotson, Esq., 4606
       Charleston Terrace, N.W., Washington D.C. 20007-1911.

   FEDERAL COMMUNICATIONS COMMISSION George R. Dillon Assistant Chief,
   Enforcement Bureau

   Frank Neely, Forfeiture  Order, 19 FCC Rcd 16135 (Enf. Bur. 2004)
   ("Forfeiture Order").

   47 C.F.R. SS 73.1745(a).

   Frank Neely, Notice of Apparent Liability for Forfeiture, NAL/Acct. No.
   200332640007 (Enf. Bur., Norfolk Office, released July 16, 2003) ("NAL").

   Forfeiture Order, 19 FCC Rcd at 16135.

   Id.

   Id.

   47 U.S.C. S 503(b).

   47 C.F.R. S 1.80.

   12 FCC Rcd 17087 (1997), recon. denied, 15 FCC Rcd 303 (1999).

   47 U.S.C. S 503(b)(2)(D).

   See Forfeiture Policy Statement, 12 FCC Rcd at 17100; 47 C.F.R. S
   1.80(b)(4), Note to paragraph (b)(4): Section II. Adjustment Criteria for
   Section 503 Forfeitures.

   See PJB Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089 (1992)
   ("PJB Communications"); see also Forfeiture Policy Statement, 12 FCC Rcd
   at 17106-07, P 43.

   See NAL at P 13.

   Petition for Reconsideration at 4.

   See Forfeiture Policy Statement,  12 FCC Rcd at 17158 P 113 ("As for
   forfeitures that a licensee believes it cannot afford to pay relative to
   its financial situation, we must look to the totality of the circumstances
   surrounding the individual case."). See, e.g., Radio X Broadcasting
   Corporation, 21 FCC Rcd 12209, 12217 (2006) (subsidiary and parent company
   financial information are both relevant to an inability to pay
   determination by the Commission);  A-O Broadcasting, 20 FCC Rcd 756, 761
   (2005) (financial information of the corporate owner is relevant to the
   Commission evaluation of an inability to pay claim); KASA Radio Hogar, 17
   FCC Rcd 6256, 6258-59 (2002) (it is appropriate to consider other income
   to determine whether the violator, in general "is financially capable of
   paying a forfeiture, not whether financial data from a limited portion of
   its operations can sustain a forfeiture" citing Hinton Telephone Company,
   7 FCC Rcd 6643, 6644 (Com. Car. Bur. 1992), review denied, 8 FCC Rcd 5176
   (1993)).,

   PJB Communications, 7 FCC Rcd at  2089.

   See  PJB Communications, supra n. 20 (forfeiture not deemed excessive
   where it represented approximately 2.02 percent of the violator's gross
   revenues); Hoosier Broadcasting Corp.. 14 FCC Rcd 3356 (CIB 1999), recon.
   denied, 15 FCC Rcd 8640, 8641 (Enf. Bur. 2000) (forfeiture not deemed
   excessive where it represented approximately 7.6 percent of the violator's
   gross revenues).

   Radio X Broadcasting Corporation, 21 FCC at 12217, P 19, citing S. Rep.
   No. 580, 95th Cong. 1st Sess. 3 (1978), reprinted in 1978 U.S.C.C.A.N.
   109, 111.

   In addition, the financial information refers to "other deductions" of
   more than $255,000, which are not identified and itemized.

   Applications of Farr Communications, Inc., 12 FCC Rcd 10733, 10736 P 8
   (1997).

   11 FCC Rcd 7399 (1996) ("Greenville").

   Id at 7403, P 13.

   Even with a significant forfeiture reduction based on inability to pay,
   the Greenville petitioner was found liable for a forfeiture higher than
   the one assessed in the instant proceeding.

   10 FCC Rcd 2861 (1995).

   Id at 2862, P 7.

   47 U.S.C. S 405.

   47 C.F.R. S 1.106(f).

   47 U.S.C. S 504(a).

   See 47 C.F.R. S 1.1914.

   (...continued from previous page)

                                                              (continued....)

   Federal Communications Commission DA 07-320

                                       3

   Federal Communications Commission DA 07-320