**DA 06-2016**

In Reply Refer to:

1800B3-TSN

Released: October 25, 2006

Fatima Response, Inc.

2044 Beverly Plaza, Suite 281

Long Beach, California 90815

P.O. Box 611

Keno, Oregon 97627-0611

Cove Road Publishing, LLC

P.O. Box 218

Cheney, Washington 99004

RE: New(FM), Merrill, Oregon

Fatima Response, Inc.

d/b/a St. Michael's Catholic Radio

Application for Construction Permit

File No. BPED-19951108NE

Facility ID No. 78553

New(FM), Merrill, Oregon

Cove Road Publishing, LLC

Application for Construction Permit

File No. BPH-19951102MA

Facility ID No. 78319

**Applications for New FM Station**

**Construction Permits**

Dear Applicants:

This refers to the above-referenced mutually exclusive applications for
a new FM radio station at Merrill, Oregon. Based on the record in this
proceeding, including the parties' responses to the staff's March 18,
2004, inquiry letter, documents produced by the parties, and evidence of
which the staff takes administrative notice, we conclude that Fatima
Response, Inc. ("FRI"), as currently incorporated, is not the FRI that
originally filed the above-referenced application, and that FRI has
failed to prosecute its application in violation of Section
73.3568(a)(1) of our Rules.[^1] Moreover, because FRI's membership has
undergone two major changes since its application was filed, the
application must be dismissed under Section 73.3573(a)(1) of our
Rules.[^2] Accordingly, we dismiss FRI's application.

**Background.** On November 8, 1995, FRI, doing business as St.
Michael's Catholic Radio, filed the above-referenced application.
According to the original application, FRI's address was 2044 Beverly
Plaza, Suite 281, Long Beach, California 90815. The members of FRI
listed in the application were Kimberly Thompson and Christine Matson,
with Thompson listed as President. The Oregon Secretary of State's
records indicate that FRI was incorporated on July 7, 1993, with its
principal place of business at 1415 Laverne, Klamath Falls, Oregon
97602. Kimberly Thompson was again listed as President, at the Long
Beach, California address. Shannon Saul was listed as Secretary and
William L. Zawila as registered agent. The corporation was assigned the
registry number 353377-81. According to the Secretary of State, FRI was
involuntarily dissolved on October 22, 1995, approximately two weeks
before filing the application, and was not reinstated.

On March 2, 1999, an amendment to the FRI application was filed.[^3] The
amendment changed FRI's mailing address to P.O. Box 611, Keno, Oregon
97627. It also listed Franck Kato as the President and only member of
FRI. Three days later, on March 5, 1999, Articles of Incorporation for
FRI were again filed with the Oregon Secretary of State. This new filing
was assigned the registry number 678625-82. Leroy Demery was listed as
the President and Franck Kato as the Secretary, both at the Keno P.O.
Box 611 address. The registered agent was Sandra Soho at 1604 Kimberly
Drive, P.O. Box 111, Klamath Falls, Oregon 97601. Again, according to
the Oregon Secretary of State, this corporation was involuntarily
dissolved on May 5, 2000, reinstated on March 12, 2004, and
administratively dissolved on May 6, 2005.

On October 18, 1999, a second amendment to the FRI application was
filed, changing the proposed coordinates of the facilities. Finally, on
November 14, 2000, a third "minor amendment" was filed, purporting to
replace Franck Kato as the sole director and member of FRI with Leroy
Demery, owing to the fact that Kato allegedly "obtained a fatal illness
that has caused physical problems and psychosis making it impossible for
him to function as director."[^4] It was further noted that the
membership of FRI had elected Mr. Demery as the new director. However,
the amended application listed Demery as holding 100 percent voting
control of and equity in FRI.

On March 18, 2004, the staff sent the Merrill applicants, FRI and Cove
Road Publishing, LLC ("Cove Road"), an inquiry letter requesting that
each amend its pending application and provide a copy of its current
corporate charter, articles of limited liability company, and/or
articles of incorporation, and the most recent annual report submitted
to the State of Oregon, and also indicate the name(s) and address(es) of
the current members / partners / shareholders of the applicant entity
and/or its governing board. Although the inquiry letter was sent to FRI
at both the Long Beach, California, and Keno, Oregon addresses, the
letter sent to the former address was returned "addressee unknown."
Leroy Demery, on behalf of FRI, submitted an updated Section II of the
application, again showing Demery as director of FRI and holder of 100
percent of its votes and equity. FRI also attached a copy of the March
5, 1999, Articles of Incorporation -- Nonprofit; a Reinstatement Annual
Report to the Oregon Secretary of State dated March 12, 2004; a
"Reinstatement Amended," also dated March 12, 2004; and an undated
"Acknowledgment of Reinstatement Amended" from the Secretary of
State.[^5] Despite the report in 2000

of Mr. Kato's physical and psychiatric deterioration, the Reinstatement
Annual Report listed him as Secretary of FRI.

**Discussion.** Based upon the evidence produced by the parties and that
of which we take administrative notice, we conclude that FRI, as
currently constituted, is not the entity that originally filed an
application for a noncommercial educational FM broadcast station at
Merrill, Oregon. It is clear that the only FRI that had ever existed in
the State of Oregon before the application was filed was the FRI
assigned registry number 353377-81 ("FRI 1"). Moreover, that corporation
was dissolved before the application was filed and has not been revived.
The evidence before us indicates that another group of individuals,
entirely different than those who comprised FRI 1, formed a new
corporation on March 5, 1999, by filing new Articles of Incorporation
and receiving a new registry number, 678625-82, from the Oregon
Secretary of State ("FRI 2"). Any contention that FRI 2 was merely a
revival and change in control of FRI 1 is gainsaid by the fact that new
Articles were filed and a new registry number assigned.[^6] The clear
indication is that the principals of FRI 2 merely formed a new
corporation using the same name as a prior corporation that had been
dissolved, and sought to replace the original Merrill applicant, FRI 1,
with their newly formed but identically named corporation, allowing them
to stand in the shoes of the pending FRI 1 applicant before the
Commission. Thus, we conclude that the proper applicant for the Merrill
NCE permit is not FRI 2, but rather the now-defunct FRI 1. We further
find that FRI 1 has failed to prosecute its Merrill application, by
failing to respond to the Commission's March 18, 2004, inquiry letter.
Accordingly, we will dismiss the application for failure to respond to
official correspondence.[^7]

Alternately, assuming that FRI 2 is a legal successor to FRI 1, FRI can
be said to have undergone at least two major changes in its membership
since its Merrill application was filed in 1995. Even assuming
*arguendo* that the March 5, 1999, incorporation of FRI 2 constituted a
revival of FRI 1, 100 percent of the members changed, from Kimberly
Thompson and Christine Matson to Franck Kato as sole member. Then, in
November of 2000, 100 percent of the membership changed again, from
Franck Kato as sole member to Leroy Demery. Either event could be viewed
as an amendment to report a major change in the composition of FRI.
Under the rules in effect when this application was filed,[^8] an
application is assigned a new file number when it is amended in such a
way that the original parties to the application do not retain more than
50 percent ownership interest in the application as originally
filed.[^9] These major "amendments," then, would be fatal to the
application, since the applicants could only file

major change amendments during the application filing window.
Accordingly, the application is subject to dismissal on this basis as
well.[^10]

**Conclusion**. For the foregoing reasons, pursuant to Sections 0.61 and
0.283 of the Commission's Rules,[^11] the application of Fatima
Response, Inc. for a new noncommercial educational FM broadcast station
at Merrill, Oregon IS DISMISSED. Cove Road's application for a new
commercial FM broadcast station at Merrill, Oregon shall be processed as
a singleton. Accordingly, Cove Road is directed to submit, within 30
days of the date of this letter, an amendment to its application, to
include, at a minimum, an exhibit demonstrating that grant of its
application comports with the broadcast ownership rules, Section
73.3555(a) of the Commission's Rules.[^12]

Sincerely,

Peter H. Doyle, Chief

Audio Division

Media Bureau

cc: J. Dominic Monahan, Esq.

[^1]: 47 C.F.R. § 73.3568(a)(1).

[^2]: *Id*. § 73.3573(a)(1).

[^3]: On June 2, 1999, an amendment was filed to correct the original
    application's file number, which had been mis-stated in the March 2,
    1999, amendment.

[^4]: October 18, 1999, amendment, Attachment A.

[^5]: In its response, FRI also alleged that Robert Wynne and William
    Ifft, principals of Cove Road and its predecessor, Klamath Basin
    Broadcasting, along with William Zawila, were conspiring to gain
    control of radio stations in northern California and southern
    Oregon, and that they had sent a derogatory fax to advertisers in
    the Klamath Falls area which included a racial epithet allegedly
    referring to Demery. Because these accusations are beyond the scope
    of the inquiry letter, we disregard these allegations as moot.

[^6]: Likewise, the fact that FRI 2 was involuntarily dissolved in 2000
    but was revived in 2004 under the same registry number supports our
    finding that FRI 2 was treated by its principals as a separate
    corporation from FRI 1.

[^7]: 47 C.F.R. § 73.3568(a)(1).

[^8]: *Id*. § 73.3573. Section 73.3573 of the Rules, "Processing FM
    broadcast station applications," was subsequently modified with the
    adoption of the 1998 First Report and Order establishing broadcast
    auctions. *See* 47 U.S.C. § 309(j)(2)(c); *Implementation of Section
    309(j) of the Communications Act-Competitive Bidding for Commercial
    Broadcast and Instructional Television Fixed Services Licenses*,
    First Report and Order, 13 FCC Rcd 15920, 16039-40 (1998); *recon
    denied*, 14 FCC Rcd 8724 (1999); *modified*, 14 FCC Rcd 12541
    (1999). However, even applying the post-auction version of Section
    73.3573 would not change the result: the current Section
    73.3573(b)(2) compels us not to accept an amendment that would
    effect a major change in ownership, such as the March 1999 and
    November 2000 "amendments" to the FRI application. As we cannot
    accept those amendments, we must look to the original 1995
    applicants. Because, as noted above, those applicants cannot be
    contacted, the application must be dismissed.

[^9]: *Id*. § 73.3573(b) (1995).

[^10]: *See Ocean Pines LPB Broadcast Corp.*, Decision, 4 FCC Rcd 7767,
    7770-71 (ALJ 1989), *aff'd* 5 FCC Rcd 5821 (Rev. Bd. 1990) (petition
    for leave to amend application to reflect new member-directors of
    nonprofit foundation denied, as 100 percent of the member-directors
    changed since application was filed, constituting a major change
    under Section 73.3573(b); motions to dismiss foundation's
    application granted due to change in control). While the Commission
    has on occasion waived rules prohibiting major changes in ownership,
    these waivers have been limited to situations in which the changes
    have occurred gradually over time during the course of legitimate
    business and not for the purpose of acquiring the pending
    application. *See*, *e.g*., *Constellation Communications*,
    Memorandum Opinion and Order, 11 FCC Rcd 18502, 18512 (1996). As
    noted above, the evidence before us demonstrates that the amendments
    to the FRI application were wholesale changes in ownership of the
    application by parties unrelated to the original applicants.

[^11]: 47 C.F.R. §§ 0.61, 0.283.

[^12]: *Id*. § 73.3555(a).