**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

INDEPENDENT COMMUNICATIONS, INC. )

)

Licensee of Television Stations )

KTTM(TV), Huron, South Dakota, )

Facility I.D. No. 28501, and )

KTTW(TV), Sioux Falls, South Dakota, )

Facility I.D. No. 28521 )

)

For a Forfeiture )

**MEMORANDUM OPINION AND ORDER**

**Adopted: August 1, 2000 Released: August 25, 2000**

By the Commission:

1\. The Commission has before it for consideration a Petition for
Reconsideration filed on July 14, 1999, by Independent Communications,
Inc. (ICI), licensee of stations KTTM(TV), Huron, South Dakota, and
KTTW(TV), Sioux Falls, South Dakota. ICI seeks reconsideration of our
decision in *Independent Communications, Inc.*, FCC 99-143 (released
June 14, 1999) (*Independent Order*), denying ICI\'s request for
reduction or rescission of the twenty-seven thousand, five hundred
dollar (\$27,500) forfeiture assessed against it in *Independent
Communications, Inc.*, 8 FCC Rcd 7886 (1993), for the stations' 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 television programming.

2\. In *Independent Order*, we rejected ICI's argument that it is
financially unable to pay the \$27,500 forfeiture. While acknowledging
that other financial indicators, such as net losses, may be relevant in
some cases, we stated that, in analyzing a corporation's financial
condition for forfeiture purposes, the Commission has previously found
gross revenues to be \"a very useful yardstick\" and, generally, the
best indicator of a licensee\'s ability to pay a forfeiture." *PJB
Communications of Virginia, Inc.*, 7 FCC Rcd 2088, 2089 (1992). The
Commission, we noted, has also found that\"\[i\]f gross revenues are
sufficiently great . . . the mere fact that a business is operating at a
loss does not by itself mean that it cannot afford to pay a
forfeiture.\" *Id*. The financial data filed by ICI showed that the
corporation experienced a net loss of \$520,667 and a gross revenue of
\$516,147 in the fiscal year ending March 31, 1993, and ICI made no
assertion and submitted no other information indicating that payment of
the \$27,500 forfeiture would threaten its ability to continue to
provide service to the public. Accordingly, consistent with Commission
precedent, we determined that rescission or reduction of the \$27,500
forfeiture was not warranted.

3\. On reconsideration, ICI insists that it has sufficiently
demonstrated its financial difficulties, pointing to the corporation's
net loss having exceeded its gross revenues in FY 1993. As further
evidence of its financial difficulties, ICI asserts that, for FY 1994,
the Commission's staff reduced the regulatory fee for station KTTM(TV)
given its satellite status and weak financial position, and, in 1998,
waived station KTTM(TV)'s main studio requirement due to its weak
financial position. In addition, ICI maintains that operation of
stations KTTM(TV) and KTTW(TV), both located in the Sioux Falls-Mitchell
DMA, ranked 109^th^ in size, has not been profitable and that
"imposition of this substantial forfeiture will seriously impact its
ability to serve its viewers." In support of this assertion, and
pursuant to an informal request by Commission staff, ICI submits its
most recent financial data consisting of the corporation's 1998 federal
tax return and Balance Sheet as of March 31, 1999. That financial data,
counsel for ICI contends, shows that the corporation had a net income
for 1998, but that it also had a retained deficit of \$3,397,834.
Accordingly, in view of its arguments and financial submissions, ICI
requests that we reconsider our action in *Independent Order* and
eliminate or substantially reduce the \$27,500 forfeiture assessed
against stations KTTM(TV) and KTTW(TV).

4\. *Discussion*. Given the facts before us in *Independent Order*, we
believe we acted appropriately and in a manner consistent with
Commission precedent when we denied the request of ICI for rescission or
reduction of the forfeiture assessed against it. Although ICI now also
relies upon the reduction of the station's regulatory fee and the waiver
of its main studio requirement as further evidence of its financial
difficulties, we do not believe that consideration of those staff
actions is indicative of ICI's present inability to pay this forfeiture.
As to its current financial status, ICI has submitted its 1998 federal
tax return and Balance Sheet as of March 31, 1999. In particular, those
documents indicate that ICI's total income for the year ending March 31,
1999, was \$2,497,302, and that, after deducting expenses, the
corporation realized a profit of \$171,634. We find ICI's total income,
in and of itself, sufficiently great to accommodate payment of the
forfeiture assessed against stations KTTM(TV) and KTTW(TV). *See PJB
Communications of Virginia, Inc.*, *supra* (forfeiture not deemed
excessive where it represented approximately 2.02 percent of violator's
gross revenues). The fact that the corporation is profitable also belies
its claimed inability to pay the forfeiture. Therefore, given the
totality of the facts and circumstances before us, we conclude that a
\$27,500 forfeiture, which amounts to approximately one percent of the
corporate licensee's gross revenues, is not excessive and elimination or
reduction of the forfeiture is not warranted.

5\. Accordingly, IT IS ORDERED, THAT Independent Communications, Inc.\'s
request that the forfeiture assessed in *Independent Communications,
Inc.*, 8 FCC Rcd 7886 (1993), *aff'd*, FCC 99-143 (released June 14,
1999), be reduced or eliminated IS DENIED.

6\. IT IS FURTHER ORDERED, THAT the Mass Media Bureau send by Certified
Mail - Return Receipt Requested - a copy of this Memorandum Opinion and
Order to Independent Communications, Inc.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Magalie Roman Salas
>
> Secretary