**DA 07-4475**

*In Reply Refer to:*

1800B3-MFW/JP

Released: October 31, 2007

Caribbean Festival Association, Inc.

P.O. Box 14046

St. Petersburg, FL 33733

Kevin F. Reed, Esq.

Dow, Lohnes & Albertson, PLLC

Suite 800

1200 New Hampshire Avenue, N.W.

Washington, DC 20036

In re: Caribbean Festival Association, Inc.

(New) LPFM, St. Petersburg, FL

Facility ID No. 134194

File No. BNPL-20010615AXI

**Petition for Reconsideration**

Dear Applicant and Counsel:

We have before us a Petition for Reconsideration (the "Petition") filed
by Caribbean Festival Association, Inc. ("Carifesta") seeking
reconsideration of an August 6, 2004, staff action[^1] dismissing
Carifesta's above-referenced application (the "Application") for a new
low power FM ("LPFM") station in St. Petersburg, Florida.[^2] For the
reasons set forth below, the Petition is denied.

**Background**. On June 15, 2001, Carifesta filed the Application. In
response to Section II, Item 3.a. of its FCC Form 318 Application
(Parties to the Application), Carifesta listed six officers and
directors. Carifesta listed the citizenship of two of these parties to
its application as "AM," signifying American citizenship, denoting the
other four parties as "JA," signifying Jamaican citizenship.[^3] Cox
filed a Petition to Deny the Application, arguing that the proposal
appeared to violate Section 310 of the Communications Act of 1934, as
amended (the "Act").[^4] In conjunction with its Opposition to the
Petition to Deny, Carifesta amended its application. It observed in its
Opposition that the Board as amended was comprised of four American
Citizens and two Jamaican citizens, one of whom has pledged to recuse
himself from all issues voted on by the Board. This, it claimed, results
in 80 percent American ownership in Carifesta.[^5]

The staff concluded that the amendment would not satisfy Section 310 of
the Act and dismissed the Carifesta application. The Staff Decision
observed that Section 310(b) prohibits the grant of a broadcast license
to any corporation of which more than one-fifth of the capital stock is
owned of record or voted by aliens or their representatives . . ."[^6]
and stated that the fact that the Jamaican citizens are legal permanent
residents of the United States did not qualify them to own or control a
radio station under Section 310 of the Act. Citing *BBC License
Subsidiary L.P.*,[^7] the staff noted that compliance with Section 310
is determined by means of a two-prong analysis, which considers both
voting interests and ownership interests. The Staff Decision held that
recusal of one Board member from voting on matters pertaining to the
proposed LPFM station met only the voting-interest criterion for
compliance with Section 310 and did not change that Board member's
ownership interest in Carifesta. The Staff Decision concluded that, even
after the application was amended, the Board was still comprised of 33
percent Jamaican ownership, in violation of Section 310 of the Act.
Carifesta filed a timely Petition for Reconsideration of the Staff
Decision on September 7, 2004.

**Discussion.** The Commission will consider a petition for
reconsideration only when the petitioner shows either a material error
in the Commission's original order, or raises additional facts, not
known or existing at the time of petitioner's last opportunity to
present such matters.[^8] In its Petition, Carifesta argues that the
staff is "simply wrong on the law." It states that it is a registered
Florida non-profit corporation and has no capital stock. Carifesta
contends that, although ownership and voting interests are considered
independently, "unless there is an investment in return for an
expectance to share in the profits through voting or non-voting stock or
a limited partner's membership, there is no investor and there is no
ownership under either prong."[^9] No board member, according to
Carifesta, has an "equity interest" in a non-profit, non-stock
corporation, and the only measurement of a cognizable interest in a
noncommercial entity for Section 310(b) purposes is the board member's
vote measured against the total number of board members. In this case,
with five Board members and one voting alien, only 20 percent of
Carifesta's voting interests are held by aliens. Carifesta asserts that
the Commission should ignore the presence of Mr. Davis on its governing
Board because, due to his agreement "to recuse himself from any matters
affecting the LPFM station,"[^10] he will have no voting interest. [^11]
Thus, Carifesta maintains that its ownership structure complies with
Section 310(b)(3) of the Act.[^12]

We disagree. While the Commission has broad authority to craft its
attribution rules to promote ownership policies, including rules to
implement LPFM multiple and cross-ownership restrictions, it lacks
authority to exclude positional interests for the purpose of applying
the statutorily mandated alien ownership provisions.[^13] Thus,
Carifesta's reliance on Section 73.858(a) of the Rules is misplaced.
That rule, by its terms, merely provides a mechanism to permit an LPFM
applicant or licensee to insulate certain positional interests for the
purpose of satisfying LPFM ownership restrictions.[^14]

Second, this approach is consistent with prior Commission policy. The
Commission anticipated this very issue when it instituted the LPFM
service. In light of questions regarding the application of statutory
foreign ownership requirements to LPFM applicants and licensees, the
Commission stated that:

> We recognize that many entities that will hold LPFM licenses will be
> non-stock corporations or other non-stock entities, and that non-stock
> entities do not have "owners" in the traditional sense. As the
> Commission has explained, the specific citizenship requirements of
> Section 310(b) reflect a deliberate judgment on the part of Congress
> to prevent undue foreign influence in broadcasting. Thus, for purposes
> of determining whether a non-stock LPFM applicant or licensee complies
> with the statutory foreign ownership requirements, we will first
> consider the citizenship of those individuals who have the ability,
> comparable to that of a traditional owner, to influence or control the
> licensee. In making these determinations we will be guided by
> Commission precedent.[^15]

The Commission has long treated directors of non-stock, non-profit
corporations as principals "because they hold comparable relationships
of personal interest and responsibility."[^16] As observed by the staff,
Commission precedent holds that entities must demonstrate compliance
with Section 310(b) of the Act on both voting and "ownership" grounds
such that a principal's agreement to recuse himself or herself from
matters relating to the station will not be sufficient to demonstrate
compliance with Section 310(b) of the Act if that principal's ownership
interest exceeds the statutory limit. Because Carifesta's Petition fails
to show a material error or omission in the original decision and did
not raise additional facts unknown or not existing until after
Carifesta's last opportunity to present such matters it will be
denied.[^17]

**Conclusion/Actions**. For the above stated reasons, the Carifesta's
Petition for Reconsideration IS DENIED.

Sincerely,

Peter H. Doyle

Chief, Audio Division

Media Bureau

cc: Michael Couzens, Esq.

[^1]: *Letter to Tamara Felton Dudley, Esq.,* Reference 1800B3-SLS (MB
    Aug. 6, 2004) ("Staff Decision").

[^2]: On September 23, 2004, Cox Radio, Inc., ("Cox"), licensee of
    station WSUN-FM, Holiday, Florida, by counsel, filed an Opposition
    to the Petition for Reconsideration (the "Opposition"), to which
    Carifesta filed a Reply on October 5, 2004.

[^3]: Specifically, the Application listed Carifesta's principals as
    follows:

    Delores Glenn AM Director

    Donald Jackson JA President

    Michelle Jackson JA Director

    Nanette Watson JA Director

    Teresa Riggs AM Director

    Trevor Davis JA Vice-president

    The Application did not provide the address for any of Carifesta's
    principals, as required by the instructions to FCC

    Form 318, and it provided no response to the columns in Item 3.a.
    regarding "Percentage of Votes" or "Percentage of Total Assets."
    *See* Application, Section II, Item 3.a.

[^4]: Section 310(b)(3) of the Act prohibits grant of a broadcast
    license to any corporation of which more than one-fifth of the
    capital stock is owned of record *or* voted by aliens or their
    representatives . . . ." 47 U.S.C. § 310(b)(3) (emphasis added).

[^5]: The amended Application disclosed the following ownership
    structure:

    Delores Glenn US Director 20% Voting Interest

    Donald Jackson JA President 20% Voting Interest

    Michelle Jackson US Director 20% Voting Interest

    Nanette Watson US Director 20% Voting Interest

    Teresa Riggs US Director 20% Voting Interest

    Trevor Davis JA Director 0% Voting Interest

    Carifesta explained that it had erroneously listed Nanette Watson as
    a Jamaican citizen in its initial application, when in fact she was
    an American citizen, and that Michelle Jackson had become an
    American citizen after the application was filed. *See* Application,
    2004 Amendment, Exhibit 1.

[^6]: *Staff Ruling* at 2, citing 47 U.S.C. § 310(b).

[^7]: *BBC License Subsidiary L.P.,* Memorandum Opinion and Order, 10
    FCC Rcd 10968 (19945).

[^8]: 47 C.F.R § 1.106, and *WWIZ, Inc*., Memorandum Opinion and Order,
    37 FCC 685, 686 (1964), *aff'd sum nom*., *Lorain Journal Co. v.
    FCC*, 351 F.2d 824 (D.C. Cir. 1965), *cert. denied*, 387 U.S. 967
    (1966).

[^9]: Petition at 2.

[^10]: Petition at 1.

[^11]: Carifesta states that the recusal of Mr. Davis, is expressly
    contemplated by Section 73.358 of the Rules, *see* 47 C.F.R. §
    73.858(a).

[^12]: *Id.* at 2-3. Carifesta acknowledges that "officerships can be
    cognizable but do not affect ownership percentages."

[^13]: *See, e.g., Wilner & Scheiner*, Memorandum Opinion and Order, 103
    FCC 2d 511 (1985), *recon. granted in part*, 1 FCC Rcd 12 (1986)
    ("We have no power to accord a statutory 'exemption' to a person
    holding a positional interest otherwise subject to the scope of
    Section 310(b) because he or she agrees as a matter of private
    contract not to exercise the powers inherent in that position.") ,
    quoted in Cox Opposition at 8-9. Carifesta states that *Wilner &
    Scheiner* should be discounted because it discusses the law in 1985,
    "before these restrictions were liberalized through both statutory
    amendment and rule making." Although Carifesta is correct to the
    extent that licensee corporations are no longer forbidden to have
    alien officers and directors, *see* *Amendment of Parts 20, 21, 22,
    24, 26, 80, 87, 90, 100, and 101 of the Commission's Rules to
    Implement Section 403(k) of the Telecommunications Act of 1996*,
    Order, 11 FCC Rcd 13072 (1996), it cites no authority overturning
    the holding that a licensee or applicant cannot avoid a Section 310
    violation simply by having an alien voluntarily recuse himself or
    herself from voting on the broadcast affairs of the applicant.

[^14]: 47 C.F.R. § 73.858(a).

[^15]: *Creation of Low Power Radio Service*, Memorandum Opinion and
    Order on Reconsideration, 15 FCC Rcd 19208, 19244 (2000).

[^16]: *Triad Television Corp*., 25 FCC 2d 848, 1021 (1958); *Loyola
    University*, 14 RR 1017 (1956).

[^17]: *See* *Infinity Broadcasting Operations, Inc*., Memorandum
    Opinion and Order, 19 FCC Rcd 4216 (2004).