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Before the
Federal Communications Commission
Washington, D.C. 20554
)
In the Matter of )
A-O Broadcasting Corporation ) File Number: EB-04-DV-114
Operation of Unlicensed Radio Station ) NAL/Acct. No.
on 97.9 MHz near Cloudcroft, New 200432800001
Mexico )
FRN 0005020474
(Former Licensee of KTMN, Cloudcroft, )
New Mexico, Facility ID 89049) )
)
ORDER
Adopted: July 29, 2008 Released: July 31, 2008
By the Regional Director, Western Region, Enforcement Bureau:
I. INTRODUCTION
1. In this Order, we cancel a monetary forfeiture in the amount of ten
thousand dollars ($10,000) against A-O Broadcasting Corporation
("A-O"), former licensee of station KTMN, in Cloudcroft, New Mexico,
and admonish A-O, for willful and repeated violation of Section 301 of
the Communications Act of 1934, as amended ("Act"), by operating on
the frequency 97.9 MHz without an authorization from the Federal
Communications Commission ("Commission"). On April 23, 2004, the
Enforcement Bureau's Denver Office issued a Notice of Apparent
Liability for Forfeiture ("NAL") in the amount of $10,000 to A-O for
operating on the frequency 97.9 MHz without an authorization from the
Federal Communications Commission ("Commission"). In this Order, we
consider A-O's arguments that its authorization did not expire by
operation of Section 312(g) of the Act; that it had authority to
operate KTMN pursuant to Section 307(c) of the Act; and that A-O does
not have sufficient revenue to pay the forfeiture. While we cancel the
forfeiture for a demonstrated inability to pay, we admonish A-O for
its willful and repeated violation of Section 301 of the Act.
II. BACKGROUND
2. On January 3, 2003, the Commission's Media Bureau notified A-O by
letter that the license for station KTMN expired and was thereby
forfeited as of November 8, 2002, pursuant to Section 312(g) of the
Act, because of that station's failure to transmit broadcast signals
for a consecutive 12 month period. The Media Bureau also denied A-O's
petition for reconsideration of the Media Bureau January 2003 Letter.
A-O filed an application for review of that action.
3. On April 8, 2004, the Denver Office received information from three
different sources that KTMN had resumed broadcast operations. A search
of the Commission's licensee database revealed that the KTMN license
for operation on 97.9 MHz had been deleted. A Denver agent then called
KTMN and spoke with a disc jockey at the station who told the agent
that KTMN had been on the air for two days. The Denver agent then
contacted the President of A-O, who confirmed that KTMN was
broadcasting on 97.9 MHz.
4. On April 9, 2004, the Denver agent telephoned A-O's President and
advised that the Commission records failed to show any Commission
operating authority for KTMN. Later that day, A-O filed a notification
with the Commission that KTMN would be broadcasting the weekend of
April 10 - 11, 2004, pursuant to Section 73.1250 of the Commission's
Rules.
5. On April 13, 2004, the Chief of the Media Bureau's Audio Division sent
a letter to A-O's counsel advising them that "DKTMN(FM), Cloudcroft,
N.M., is without authority to initiate or continue broadcast
operations." A-O was also ordered to report, by April 15, 2004,
"whether the licensee ceased operations and on what day it ceased
operations." On April 15, 2004, A-O's counsel responded to the Media
Bureau April 2004 Letter with a letter stating that "on behalf of the
licensee, I can report to you that KTMN remains on the air . . . ."
The station, however, went off the air on April 19, 2004.
6. On April 23, 2004, the Denver Office issued a NAL in the amount of
$10,000 to A-O, finding that A-O apparently willfully and repeatedly
operated on 97.9 MHz without an FCC authorization. A-O filed a
response to the NAL on May 24, 2004 ("Response"). A-O supplemented its
response ("Supplemental Response") on March 13, 2008. In its Response
and Supplemental Response, A-O argues that its authorization did not
expire by operation of Section 312(g) of the Act; that it had
authority to operate KTMN pursuant to Section 307(c) of the Act; and
that it does not have sufficient revenue to pay the forfeiture.
III. DISCUSSION
7. The proposed forfeiture amount in this case was assessed in accordance
with Section 503(b) of the 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. In examining
A-O's response, 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 other
such matters as justice may require.
8. Section 301 of the Act prohibits radio operations "except and in
accordance with this Act and with a license granted under the
provisions of this Act." On or around April 6, 2004, A-O began
transmitting on 97.9 MHz, from the Wofford Peak electronics site, near
Cloudcroft, New Mexico, located on United States Forest Service lands,
without the required Commission authorization. A-O apparently
continued to operate KTMN until Monday, April 19, 2004, despite being
notified by the Commission that KTMN's license had been automatically
forfeited, by operation of law, and that KTMN had no Commission
authority to initiate or continue broadcast operations.
9. A-O does not deny its operation on 97.9 MHz on the dates detailed
above, but instead argues that its operation was authorized. First,
A-O argues that because it operated on 97.9 MHz at least once between
November 7, 2001, and November 7, 2002, its authorization had not been
forfeited by operation of Section 312(g) of the Act. Second, A-O
argues that because it filed an application to renew the KTMN license,
it had authority to operate until a court or the Commission issued a
final order on the renewal application. On January 18, 2008, the
Commission released the 2008 Memorandum Opinion and Order, in which it
considered the application for review filed by A-O of the Media Bureau
actions, described above, along with various other petitions and
requests filed by A-O concerning its operation of KTMN. In the
Memorandum Opinion and Order, the Commission considered A-O's
arguments, as described above, and rejected them. Specifically, the
Commission stated that "A-O's license [KTMN] expired on November 8,
2002 . . . ." Because the Commission has determined that the KTMN
license expired on November 8, 2002, we find that A-O had no authority
to operate on 97.9 MHz in April 2004.
10. A-O also argues that it is not able to pay the forfeiture proposed by
the Denver Office because it had no gross revenues for the three
calendar years prior to the NAL, and supplies financial data to
support that claim. To assess A-O's inability to pay argument, we must
consider a related proceeding, where, on December 29, 2003, the
Commission assessed a $25,000 forfeiture against A-O for operating
KTMN in willful and repeated violation of Sections 1.1310, 11.35,
73.1125, and 73.1400 of the Rules. In the 2003 Forfeiture Order, the
Commission took into account an argument from A-O concerning its
inability to pay the forfeiture amount as A-O submitted documentation
stating that it had no revenues. Generally, when analyzing a financial
hardship claim, the Commission has looked to gross revenues as a
reasonable and appropriate yardstick in determining whether a licensee
is able to pay the assessed forfeiture. In the 2003 Forfeiture Order,
however, the Commission determined that because KTMN was on the air
for such a brief period of time, it was necessary to look at other
factors other than gross revenues to determine A-O's ability to pay
the proposed forfeiture. The Commission stated that because A-O had
filed an application for a construction permit for KTMN at a new site
along with a subsequent license application for authority to operate
at the new site, A-O potentially had sufficient funds to reconstruct
KTMN at the new site and did so. In order to determine A-O's ability
to pay the proposed monetary forfeiture in that proceeding, the
Commission found that it was necessary to know what resources were
available to A-O - e.g., A-O's lines of credit, A-O's liquid assets
and the assets and income of A-O's owner. Because A-O did not provide
that information, the Commission concluded that it was unable to
determine whether A-O could pay the proposed forfeiture amount, and
consequently, declined to reduce the forfeiture on the basis of A-O's
inability to pay.
11. A-O appealed the 2003 Forfeiture Order, and in the 2005 Memorandum
Opinion and Order, the Commission again addressed A-O's inability to
pay argument, taking notice of the Response A-O filed in this
proceeding, concerning the NAL issued by the Denver Office. The
Commission stated that according to the financial information found in
the Response, A-O's operations and capital investments are funded
primarily by loans and, to a lesser extent, by issuing new stock, and
that A-O's loans are from its shareholder and from the Southern New
Mexico Radio Foundation, whose president is also the owner and
president of A-O. The Commission determined that "if A-O wants to
continue to pursue its inability to pay claim, A-O must prove that it
does not have access to the resources necessary to pay the
forfeiture." The Commission concluded that because "A-O has not proven
this, we are unable to determine that it cannot pay the forfeiture
amount and we will not reduce the forfeiture on the basis of A-O's
inability to pay."
12. After the release of the 2008 Memorandum Opinion and Order, earlier
this year, A-O supplemented its Response to the Denver NAL, in order
to comply with the determination made by the Commission concerning
A-O's financial documentation in the 2005 Memorandum Opinion and
Order. A-O's Supplemental Response, includes continuing financial
information for the corporation beginning April 1, 1997, through March
31, 2007. This financial information shows us, in retrospect, the
sources of income A-O had access to after the release of the 2005
Memorandum Opinion and Order. Upon review of this information, we see
no apparent access to or use of lines of credit, and no apparent
liquid assets. While the information does not reveal the income of
A-O's shareholder (owner), it does show us what part of that income he
made available to A-O in the form of loans in the years since the
release of the 2005 Memorandum Opinion and Order. In fact, since the
release of the 2005 Memorandum Opinion and Order, loans from A-O's
shareholder appear to be the only significant source of cash to the
corporation. We have reviewed this documentation, and looked at the
totality of A-O's particular financial circumstances, including its
accumulated debt, in evaluating its inability to pay claim, as well as
the potential sources of income available to A-O. We are satisfied
that the data demonstrates that A-O does not have access to the
resources necessary to pay the proposed forfeiture amount. A-O has not
operated KTMN since 2004, and, consequently, A-O has received no
revenues from 2004 through 2007. Also, according to the 2008
Memorandum Opinion and Order, A-O has not been the licensee of KTMN
for at least that long. Additionally, A-O shows no access to any
additional resources, other than loans from its shareholder,
particularly in the years subsequent to the issuance of the Denver NAL
in April 2004. Given this new data, we find that payment of the
proposed $10,000 forfeiture would impose financial hardship on A-O.
Therefore, we conclude that cancellation of the forfeiture is
warranted. Nevertheless, we find that it is appropriate to admonish
A-O for its willful and repeated violation of Section 301 of the Act.
IV. ORDERING CLAUSES
13. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 503(b) of the
Communications Act of 1934, as amended ("Act"), and Sections 0.111,
0.311 and 1.80(f)(4) of the Commission's Rules, that the proposed
forfeiture in the amount of ten thousand dollars ($10,000) issued to
A-O Broadcasting Corporation, in the April 23, 2004, Notice of
Apparent Liability for willful and repeated violations of Section 301
of the Act IS CANCELLED.
14. IT IS FURTHER ORDERED that A-O Broadcasting Corporation, IS ADMONISHED
for its willful and repeated violations of Section 301 of the Act.
15. IT IS FURTHER ORDERED that a copy of this Order shall be sent by First
Class Mail and Certified Mail Return Receipt Requested to A-O
Broadcasting Corporation, at its address of record, and Barry Wood,
Esquire, its counsel of record.
FEDERAL COMMUNICATIONS COMMISSION
Rebecca L. Dorch
Regional Director, Western Region
Enforcement Bureau
47 U.S.C. S: 301.
Notice of Apparent Liability for Forfeiture, NAL/Acct. No. 200432800001
(Enf. Bur., Western Region, Denver Office, released April 23, 2004).
47 U.S.C. S: 312(g).
47 U.S.C. S: 307(c).
47 U.S.C. S: 312(g). At the time of the Media Bureau action, Section
312(g) provided that "if a broadcasting station fails to transmit
broadcast signal for any consecutive twelve-moth period, then the station
license . . . expires at the end of that period . . . ."
Letter to Paul H. Brown, Esq., 18 FCC Rcd 35 (MB 2003) ("Media Bureau
January 2003 Letter").
See Letter to Paul H. Brown, Esq., 18 FCC Rcd 3818 (MB 2003).
The Commission's database lists the station call sign as "DKTMN" to
reflect its deletion.
A-O's President indicated that the station was simulcasting 100% of KUPR's
programming, a FM broadcast station licensed to Southern New Mexico Radio
Foundation to serve Alamogordo, New Mexico, operating on 91.7 MHz. A-O's
President, who is also the President of Southern New Mexico Radio
Foundation, stated that KTMN was broadcasting from the Wofford Mountain
electronics site, located on United States Forest Service lands near
Cloudcroft, New Mexico, and had been on the air for the last two days.
47 C.F.R. S: 73.1250 (Broadcasting Emergency Information). See Letter from
A-O Broadcasting Corporation, KTMN, Cloudcroft, New Mexico, to Marlene
Dortch, Secretary, Federal Communications Commission (April 9, 2004). A-O
also contacted staff in the Audio Division of the Media Bureau about
receiving temporary authority to operate April 10 - 11, 2004.
April 13, 2004, letter from Peter H. Doyle, Chief, Audio Division, Media
Bureau, to Paul H. Brown, Wood, Maines & Brown ("Media Bureau April 2004
Letter").
Id.
April 15, 2004, letter from Barry D. Wood, Wood, Maines & Brown, to Peter
H. Doyle, Chief, Audio Division, Media Bureau.
The Denver Office also received complaints that A-O was again broadcasting
on 97.9 MHz near Cloudcroft, New Mexico, between July 2 and July 6, 2004.
No later reports were received.
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)(E).
47 U.S.C. S: 301.
A-O filed the renewal application on July 3, 2003, eights months after the
twelve-month period had run under Section 312(g), and almost two years
before the July 1, 2005, filing deadline for New Mexico radio station
renewals. 47 C.F.R. S:S: 73.1020, 73.3539.
A-O Broadcasting Corporation, 23 FCC Rcd 603 (2008) ("2008 Memorandum
Opinion and Order").
2008 Memorandum Opinion and Order, 23 FCC Rcd at 617.
47 C.F.R. S:S: 1.1310, 11.35, 73.1125, and 73.1400. A-O Broadcasting
Corporation, 31 Comm. Reg (P&F) 411 (2003) ("2003 Forfeiture Order"). The
noted violations involved A-O's failing to comply with radio frequency
radiation ("RFR") maximum permissible exposure ("MPE") limits applicable
to transmitters on towers, failing to have Emergency Alert System ("EAS")
equipment installed and operating, failing to maintain a main studio, and
failing to have adequate transmission system control.
2003 Forfeiture Order at para. 24.
See PJB Communications of Virginia, Inc., 7 FCC Rcd 2088 (1992).
2003 Forfeiture Order at para. 24.
Id.
Id.
A-O Broadcasting Corporation, 20 FCC Rcd 756 (2005) ("2005 Memorandum
Opinion and Order").
2005 Memorandum Opinion and Order, 20 FCC Rcd at 761.
Id.
2005 Memorandum Opinion and Order, 20 FCC Rcd at 761 - 762.
2005 Memorandum Opinion and Order, 20 FCC Rcd at 762.
The initial Response contained continuing financial information (compiled
balance sheets, compiled statements of operations, compiled statement of
shareholder equity, and compiled statements of cash flow) from April 1,
1997 through March 31, 2004. The Supplemental Response continues that data
through March 31, 2007.
See 2005 Memorandum Opinion and Order, 20 FCC Rcd at 762; SM Radio, Inc.,
23 FCC Rcd 2429, 2432 (2008); Radio X Broadcasting Corporation, 21 FCC Rcd
12209, 12216 (2006).
47 U.S.C. S:S: 301, 503(b), 47 C.F.R. S:S: 0.111, 0.311, 1.80(f)(4).
47 U.S.C. S: 301.
Federal Communications Commission DA 08-1757
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Federal Communications Commission DA 08-1757