Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | File Number EB-05-KC-143     |
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| 127, Inc.                        | ) | NAL/Acct. No. 200632560002   |
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| Licensee of Station KLFJ         | * | FRN 0011407814               |
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| Facility ID# 17137               | * |                              |
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| Springfield, Missouri            | ) |                              |
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## MEMORANDUM OPINION AND ORDER

**Adopted:** February 26, 2007 **Released:** February 28, 2007

By the Assistant Chief, Enforcement Bureau:

**I. INTRODUCTION**

1.  In this Memorandum Opinion and Order ("Order"), we deny the petition
    for reconsideration filed by 127, Inc. of the *Forfeiture Order*
    issued September 6, 2006.[^1] The *Forfeiture Order* imposed a
    monetary forfeiture in the amount of \$16,800 on 127, Inc. for the
    willful and repeated violation of Sections 73.1125(a) and 73.1745 of
    the Commission's Rules ("Rules") and the willful violation of
    Section 73.3526(a) of the Rules.[^2] The noted violations involved
    127, Inc.'s failure to maintain a main studio, operating overpower
    during nighttime hours, and failure to make available for inspection
    the station's public inspection file.

### II. BACKGROUND

2.  In response to a report of a violation, on December 13 and 14, 2005,
    an agent from the Commission's Kansas City Office of the Enforcement
    Bureau ("Kansas City Office") monitored station KLFJ's signal from a
    location in Springfield, Missouri. The agent's monitoring indicated
    no power reduction in KLFJ's signal from mid afternoon until after
    sunset, which is inconsistent with the terms of the station
    authorization. Telephone calls to KLFJ on December 14, 2005 went
    unanswered at 9:03 AM, 10:38 AM, 1:05 PM, 2:55 PM and 4:00 PM this
    date.

3.  On December 15, 2005, the agent contacted the executive assistant to
    the station's owner at Surrey Vacation Resorts/Surrey Grand Crown
    Resort, by using the phone number provided in KLFJ's EEO Form 396.
    The executive assistant stated there was no studio for the radio
    station and station programming is done via computer from West
    Hollywood, California. She did not know the location of the public
    file but suggested checking at the Econo Lodge in Springfield. She
    stated the KLFJ phone number listed in the Springfield phone book is
    supposed to be answered and is located at the Econo Lodge along with
    the computer containing the station's aired material. She provided
    the phone number for the contract engineer for KLFJ and stated he
    would be able to aid with inspection of the transmitter and
    equipment located at the Econo Lodge.

4.  Still on the same date, the agent, accompanied by the KLFJ contract
    engineer, inspected KLFJ's transmitter site and programming
    equipment located in Springfield, Missouri. The transmitter was
    operating at a power of 1125 watts. The contract engineer stated
    that the station had operated at this power level for two to three
    months. He stated that there was no studio or studio equipment for
    KLFJ. The agent found no microphone or other audio mixing
    capabilities that would allow origination of programming from the
    Econo Lodge, the transmitter site, or any other location in
    Springfield. Station programming material is uploaded to one of the
    two computers located in a back room of the Econo Lodge motel via
    telephone line from West Hollywood, California. During the
    inspection, the contract engineer was able to reduce the transmitter
    power to approximately 25 watts both manually and by using the
    remote control. He stated that remote control instructions were left
    at the Econo Lodge prior to the sale of hotel. According to the new
    owner of the Econo Lodge, current Econo Lodge employees did not have
    any knowledge of the radio station operation or of any station
    records. The contract engineer stated he is called by the station
    only as needed. He stated he had no knowledge of radio station staff
    locally and stated no chief operator was designated for the station.
    A check of the telephone for the station located at the Econo Lodge
    front desk found the telephone unplugged but operating correctly
    when plugged in.

5.  On March 3, 2006, the Kansas City Office issued to 127, Inc. a
    *Notice of Apparent Liability for Forfeiture* ("*NAL*") proposing a
    forfeiture in the amount of \$21,000 that found 127, Inc. had
    willfully and repeatedly violated Sections 73.1125(a) and 73.1745 of
    the Rules, and had willfully violated Section 73.3526(a) of the
    Rules.[^3] In response to the *NAL*, 127, Inc. did not deny the
    violations, stated that it had made efforts to correct the
    violations, and requested cancellation or reduction of the proposed
    forfeiture due to its "spotless track record" and "many years of
    untarnished service."[^4] On September 6, 2006, the Enforcement
    Bureau released the *Forfeiture Order*. The Enforcement Bureau
    reduced the forfeiture amount from \$21,000 to \$16,800, based on
    127, Inc.'s history of compliance with the Rules. 127, Inc. filed a
    petition for reconsideration of the *Forfeiture Order* requesting
    further reduction or cancellation of the forfeiture.

**III. DISCUSSION**

6.  The forfeiture amount in this case was assessed in accordance with
    Section 503(b) of the Act, [^5] Section 1.80 of the Rules,[^6] and
    *The Commission's Forfeiture Policy Statement and Amendment of
    Section 1.80 of the Rules to Incorporate the Forfeiture
    Guidelines*.[^7] In examining 127, Inc.'s petition, 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 any other such matters as
    justice may require.[^8]

7.  In its petition for reconsideration, 127, Inc. alleges that it did
    not violate Section 73.3526 of the Rules, because the station's
    public file was located at the Econo Lodge. In a sworn affidavit,
    the station owner states that the new owner of the Econo Lodge was
    aware that the file was located in the hotel and agreed to make it
    available to the public.[^9] 127, Inc. claims that its violation of
    the public file rules was not willful, because, unbeknownst to it,
    the new owner of the Econo Lodge failed to inform his employees
    about the public file. These facts, however, provide no basis to
    cancel or reduce the forfeiture associated with this violation. It
    is undisputed that on December 15, 2005 in response to a request
    during normal business hours, station KLFJ, represented by the owner
    and employees of the Econo Lodge, was unable to produce a public
    file. Although 127, Inc. may not have been aware of the break down
    in training for the Econo Lodge employees, 127, Inc. consciously and
    deliberately placed the Econo Lodge owner in charge of the station's
    public file and Econo Lodge employees were unable to make the file
    available upon request. The "Commission has long held that licensees
    and other Commission regulatees are responsible for the acts and
    omissions of their employees and independent contractors,"[^10] and
    the Commission has "consistently refused to excuse licensees from
    forfeiture penalties where actions of employees or independent
    contractors have resulted in violations."[^11]

8.  Similarly, 127, Inc. alleges its violations of Sections 73.1125(a)
    and 73.1745 of the Rules were not willful, because the station owner
    relied on contractors and employees to set up the main studio and
    operate the station consistent with the Rules. Specifically, the
    station owner hired a contractor to assist in the station purchase
    and set up. That contractor later hired a contract engineer and
    station manager.[^12] In an affidavit, the contractor stated the
    station's main studio was complete and working when it first moved
    to the Econo Lodge. At some point before the inspection, however, he
    alleges much of the station's equipment was removed from the Econo
    Lodge, unbeknownst to himself and the station owner. The contractor
    also states that the contract engineer was instructed to reduce the
    station's transmitter power at night and failed to do so,
    unbeknownst to himself and the station owner. These facts, however,
    provide no basis to cancel or reduce the forfeitures associated with
    these violations. 127, Inc., as the licensee, is responsible for
    ensuring compliance with the Rules, and consciously hired others to
    set up and operate its radio station.[^13] As discussed above, 127,
    Inc. cannot absolve itself of liability by claiming it was unaware
    of the actions and inactions of those employees and contractors.

9.  127, Inc. agrees that its violations of Sections 73.1125(a) and
    73.1745 of the Rules were repeated, but seeks a reduction of the
    forfeitures, citing *U.S. v. Daniels*, [^14] because it claims its
    violations were not willful, it was acting in good faith, and there
    were no complaints received about the station. As discussed above,
    we agree with the determination in the *Forfeiture Order* that these
    violations were willful.[^15] We also find no reason to reduce the
    forfeiture simply because no complaints against the station have
    been filed. We note, however, that the agent from Kansas City first
    monitored the station in response to a report of a violation by the
    station, which was essentially a complaint. Finally, we find that
    127, Inc.'s actions -- hiring a contractor to set up the main studio
    and a station engineer to reduce power at night and purchasing main
    studio equipment -- do not constitute good faith efforts worthy of a
    forfeiture reduction. While these actions were taken prior to the
    inspection, they were not specifically taken to remedy a violation.
    Rather, they were prerequisites to operating the station consistent
    with the Rules and were taken prior to the occurrence of any
    violations.

10. Finally, 127, Inc. notes that following the release of the
    *Forfeiture Order* it moved the main studio to another location and
    hired a station manager. 127, Inc. also terminated its relationship
    with the contract engineer. However, corrective action taken to come
    into compliance with the Rules is expected, and does not nullify or
    mitigate any prior forfeitures or violations.[^16]

11. We conclude there is no basis for reversal of the ultimate finding
    in the *Forfeiture Order* that 127, Inc. willfully and repeatedly
    failed to maintain a main studio and operated overpower at night in
    violation of Sections 73.1125(a) and 73.1745 of the Rules and
    willfully failed to make available a public inspection file in
    violation of Section 73.3526(a) of the Rules.

**IV. ORDERING CLAUSES**

12. Accordingly, **IT IS ORDERED** that, pursuant to Section 405 of the
    Communications Act of 1934, as amended,[^17] and Section 1.106 of
    the Commission's Rules,[^18] 127, Inc.'s petition for
    reconsideration of the September 6, 2006 *Forfeiture Order* **IS**
    hereby **DENIED**.

13. **IT IS ALSO ORDERED** that, pursuant to Section 503(b) of the Act,
    and Sections 0.111, 0.311 and 1.80(f)(4) of the Rules,[^19] 127,
    Inc. **IS LIABLE FOR A MONETARY FORFEITURE** in the amount of
    sixteen thousand eight hundred dollars (\$16,800) for violation of
    Sections 73.1125(a), 73.1745, and 73.3526(a) of the Rules.

14. Payment of the \$16,800 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.[^20]
    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, S.W., Room 1A625, Washington, D.C.
    20554.[^21]

15. **IT IS FURTHER ORDERED** that this Order shall be sent by regular
    mail and by certified mail, return receipt requested, to 127, Inc.
    at its address of record and its counsel, David S. Akers, 430C State
    Highway 165 South Branson, MO 65616.

**FEDERAL COMMUNICATIONS COMMISSION**

George R. Dillon

Assistant Chief, Enforcement Bureau

[^1]: *127, Inc.*, Forfeiture Order, 21 FCC Rcd 10003 (Enf. Bur. South
    Central Region September 6, 2006) ("*Forfeiture Order*").

[^2]: 47 C.F.R. §§ 73.1125(a),73.1745, 73.3526(a).

[^3]: *Notice of Apparent Liability for Forfeiture,* NAL/Acct. No.
    200632560002 (Enf. Bur., South Central Region, Kansas City Office,
    released March 3, 2006).

[^4]: 127, Inc. states that it let its contractor respond on its behalf,
    because he stated the station was in compliance and that he would
    handle it. 127, Inc. raises the issues it claims it would have
    raised in response to the *NAL* in its petition for reconsideration.

[^5]: 47 U.S.C. § 503(b).

[^6]: 47 C.F.R. § 1.80.

[^7]: 12 FCC Rcd. 17087 (1997), *recon. denied*, 15 FCC Rcd. 303 (1999).

[^8]: 47 U.S.C. § 503(b)(2)(D).

[^9]: We note that the new owner of the Econo Lodge was present during
    the inspection and stated he had no knowledge of the public file.

[^10]: *Eure Family Limited Partnership*, Memorandum Opinion and Order,
    17 FCC Rcd 21861, 21863,-64, para. 7 (2002); *MTD, Inc.,* Memorandum
    Opinion and Order, 6 FCC Rcd 34 (1991) (holding that a company\'s
    reliance on an independent contractor to construct a tower in
    compliance of FCC rules does not excuse that company from a
    forfeiture); *Wagenvoord Broadcasting Co.*, Memorandum Opinion and
    Order, 35 FCC 2d 361 (1972) (holding a licensee responsible for
    violations of FCC rules despite its reliance on a consulting
    engineer); *Petracom of Joplin, L.L.C.*, 19 FCC Rcd 6248 (Enf. Bur.
    2004) (holding a licensee liable for its employee\'s failure to
    conduct weekly EAS tests and to maintain the \"issues/programs\"
    list).

[^11]: *American Paging, Inc. of Virginia*, Notice of Apparent Liability
    for Forfeiture, 12 FCC Rcd 10417, 10420, para. 11 (Enf. & Cons. Inf.
    Div., Wireless Tel. Bur. 1997) (quoting *Triad Broadcasting
    Company,* 96 FCC 2d 1235, 1244 (1984).

[^12]: It is unclear from the contractor's affidavit whether he hired
    the station manager before or after the inspection. During the
    inspection, neither the contract engineer nor the Econo Lodge owner
    were aware of any employees, such as a station manager, employed by
    the station.

[^13]: Although we conclude that 127, Inc.'s violation was willful, we
    do not conclude that it intended to violate the Rules. Section
    312(f)(1) of the Act, 47 U.S.C. § 312(f)(1), which applies to
    violations for which forfeitures are assessed under Section 503(b)
    of the Act, provides that "\[t\]he term 'willful,' ... means the
    conscious and deliberate commission or omission of such act,
    irrespective of any intent to violate any provision of this Act or
    any rule or regulation of the Commission authorized by this Act
    ...." *See Southern California Broadcasting Co.*, 6 FCC Rcd 4387
    (1991).

[^14]: *United States v. Daniels*, 418 F. Supp 1074 (1976).

[^15]: We note that in the *Daniels* case, the Commission did not allege
    a willful violation. The Court found that the Defendant lacked
    actual knowledge of the violated Rule, which had recently been
    amended. While actual knowledge was irrelevant to the question of
    whether there was a repeated violation, the Court found a reduction
    in the forfeiture appropriate, because: the Defendant was unaware of
    the amended Rule; the violations ceased immediately upon being
    informed of the violation; the violations were inadvertent; the
    Defendant was merely following in good faith the broadcasting hours
    set out in his license; and there was no record of any complaints of
    interference filed. In this case, 127, Inc. willfully and repeatedly
    violated well established Rules that were in fact known to the
    contractor hired to set up the main studio.

[^16]: *See Seawest Yacht Brokers*, Forfeiture Order, 9 FCC Rcd 6099
    (1994).

[^17]: 47 U.S.C. § 405.

[^18]: 47 C.F.R. § 1.106.

[^19]: 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4), 73.1125(a), 73.1745,
    73.3526(a).

[^20]: 47 U.S.C. § 504(a).

[^21]: *See* 47 C.F.R. § 1.1914.