**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In the Matter of                 | *  | File No. EB-02-DV-383        |
|                                  | *) |                              |
| Arnold Broadcasting Company,     | ** | NAL/Acct. No. 200332800007   |
| Inc.                             |    |                              |
|                                  | *  | FRN No. 0006-1597-43         |
| Station KNEC(FM)                 | *) |                              |
|                                  | ** |                              |
| Yuma, Colorado                   |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
|                                  |    |                              |
|                                  | *  |                              |
|                                  | *) |                              |
|                                  | ** |                              |
+----------------------------------+----+------------------------------+

**FORFEITURE ORDER**

**Adopted: July 27, 2004 Released: July 29, 2004**

By the Chief, Enforcement Bureau:

# INTRODUCTION

1.  In this *Forfeiture Order* ("*Order*"), we issue a monetary
    forfeiture in the amount of six thousand dollars (\$6,000) to Arnold
    Broadcasting Company, Inc. ("Arnold") for willful and repeated
    violation of Section 301 of the Communications Act of 1934
    ("Act")[^1] and Section 11.61(a)(2) of the Commission's Rules
    ("Rules").[^2] The noted violations involve Arnold's operating radio
    transmitting equipment without a license and failing to receive and
    transmit required weekly tests of the Emergency Alert System
    ("EAS").

2.  On December 4, 2002, the Commission's Denver District Office
    ("Denver Office") issued a *Notice of Apparent Liability for
    Forfeiture* ("*NAL*") to Arnold for a forfeiture in the amount of
    twelve thousand dollars (\$12,000).[^3] Arnold filed a response to
    the *NAL* on January 2, 2003.

# BACKGROUND

3.  On June 13, 2002, a Denver Office agent inspected station KNEC. The
    agent determined that KNEC operated an unlicensed
    studio-to-transmitter link ("STL") on 948.0 MHz at KNEC's studio,
    205 South Main Street, Yuma, Colorado. The STL link terminated at
    KNEC's transmitter site approximately 12 kilometers south of Yuma,
    Colorado.[^4] The station manager represented to the agent that KNEC
    began STL operations in May 1999. In addition, on the same day the
    Denver Office agent reviewed KNEC's station logs and determined that
    KNEC received no required weekly EAS test ("RWT") from the
    designated LP1 or LP2 sources for the period from May 13, 2002 to
    June 9, 2002.[^5] Further, the Denver Office agent found that KNEC's
    station logs revealed that the station failed to transmit two
    required RWTs during the same time period. Finally, the Denver
    Office agent also noted that while KNEC was monitoring the
    designated LP1 radio station KNNG, it was not monitoring a
    designated LP2 station.[^6] Instead, KNEC was monitoring the
    National Weather Service ("NWS"). According to the State of Colorado
    EAS Plan, the NWS is a recommended additional source but not a
    replacement for the designated local primary station.

4.  On December 4, 2002, the Denver Office issued an *NAL* to Arnold for
    twelve thousand dollars (\$12,000) for operating an aural broadcast
    auxiliary station without a license in violation of Section 301 of
    the Communications Act of 1934, as amended, and for failing to
    receive and transmit the required RWTs and RMTs in willful and
    repeated violation of Section 11.61 of the Rules during the period
    May 13, 2002 -- June 9, 2002.[^7] Arnold responded to the *NAL*
    conceding that KNEC failed to log the receipt and broadcast of EAS
    tests. Arnold argues that this failure was "in no way attributable
    to the fact that it was monitoring the \[NWS\] instead of one of the
    two designated LP2 stations."[^8] Therefore, Arnold contends, KNEC's
    monitoring the NWS rather than the LP2 should not figure into the
    forfeiture amount.

5.  Arnold submits that operating an STL without a license should be
    deemed a "much less serious offense" than operating a full-service
    station without a license. Arnold argues that its operation of an
    unlicensed STL posed "no significant risk of interference to other
    stations," as evidenced by Section 74.24 of the Rules, which permits
    720 hours of operation per year without a license. Arnold further
    contends that this permission for unlicensed operation "can lead a
    licensee into making the sort of innocent mistake that Arnold made,
    to wit, believing that a license would be duly issued...." Arnold
    further stated that it expected its consulting engineer to submit
    its STL application and that it would receive a license in due
    course. Arnold admitted that it "did not think about the matter
    again" until the Denver Office agent's inspection.

# discussion

6.  The proposed forfeiture amount in this case was assessed in
    accordance with Section 503(b) of the Communications Act of 1934, as
    amended, ("Act"),[^9] Section 1.80 of the Rules,[^10] and *The
    Commission's Forfeiture Policy Statement and Amendment of Section
    1.80 of the Rules to Incorporate the Forfeiture Guidelines*, 12 FCC
    Rcd 17087 (1997), *recon. denied*, 15 FCC Rcd 303 (1999) ("*Policy
    Statement*"). In examining Arnold'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 such other matters as justice may
    require.[^11]

7.  Section 301 of the Act mandates that "\[n\]o person shall use or
    operate any apparatus for the transmission of energy or
    communications or signals by radio" within the United States "except
    under and in accordance with this Act and with a license in that
    behalf granted under the provisions of this Act."[^12] Section 74.24
    of the Rules permits short-term operation of broadcast auxiliary
    stations subject to several conditions, including the requirement
    that such operation is on a secondary, non-interference basis to
    regularly authorized stations and shall be discontinued immediately
    if perceptible interference is caused to a regularly authorized
    station.[^13] The short-term operations may not exceed 720 hours
    annually per frequency. [^14]

8.  Arnold does not claim that its STL operation did not exceed 720
    hours annually during its two years of unlicensed operation. Indeed,
    Arnold appears to concede that it made greater than 720 hours annual
    use of the station without first determining whether or not it had a
    license. Arnold relied on an independent contractor to file an
    application for the station and expected that a license would be
    issued in due course. Arnold admits that it "did not think about the
    matter again" until the Denver Office agent's inspection. Arnold
    argues that its failure to follow up with its contractor was an
    innocent mistake. We find this argument to be without merit. "The
    Commission has long held that licensees and other Commission
    regulatees are responsible for the acts and omissions of their
    employees and independent contractors and has consistently refused
    to excuse licensees from forfeiture penalties where actions of
    employees or independent contractors have resulted in
    violations."[^15]

9.  Likewise, we find that Arnold's argument that its operations posed
    no significant risk to other stations is a fundamental
    misunderstanding of the Communications Act requirement of a license
    prior to broadcasting radio transmissions. It is well established
    that enforcement of Section 301 of the Act does not depend on the
    existence of interference caused by the unauthorized
    operations.[^16]

10. Arnold also appears to rely upon the flexibility of Section 74.24 of
    the Rules to mitigate Arnold's own failure to ensure it had a
    license: "In view of the fact that STL stations can be placed in
    operation and operated for up to 720 hours per year without a
    license...it is unreasonable to the extent of being arbitrary and
    capricious for the Commission to assess the same forfeiture for
    operating a \[sic\] 'unlicensed' STL station that it would for
    operating an unlicensed full service station."[^17] We agree that
    the proposed forfeiture here was excessive under the circumstances.
    The unauthorized operation in this case is not a violation on the
    same order as is construction and operation with no color of
    authority.[^18] In this case, Section 74.24 of the Rules gave Arnold
    the color of authority to begin operations, although Arnold had no
    authority to continue operations past the specified 720 hours for
    more than two years. Accordingly, we impose a forfeiture for this
    violation of four thousand dollars (\$4,000), the base amount for
    using an unauthorized frequency, rather than the ten thousand
    dollars (\$10,000) proposed in the *NAL*.

11. Section 11.61(a)(2) of the Rules requires weekly tests of the EAS
    header codes and End of Message ("EOM") codes. At the time of the
    inspection on June 13, 2002, Arnold's records showed that it failed
    to receive RWTs between May 13, 2002 and June 9, 2002. In addition,
    Arnold's records showed that it failed to transmit RWTs during the
    same time period. Arnold does not dispute that it failed to conduct
    RWTs during this time period. Accordingly, without regard to
    Arnold's monitoring of the NWS, we conclude that a two thousand
    dollar (\$2,000) forfeiture is appropriate for this violation.

12. We have examined Arnold's response to the *NAL* pursuant to the
    statutory factors above, and in conjunction with the *Policy
    Statement* as well. As a result of our review, we conclude that
    Arnold willfully and repeatedly violated Section 301 of the
    Communications Act of 1934, as amended,[^19] and Section 11.61(a)(2)
    of the Rules, but we find that the forfeiture should be reduced to
    \$6,000 for these violations.

# ordering clauses

13. Accordingly, **IT IS ORDERED** that, pursuant to Section 503(b) of
    the Act, and Sections 0.111, 0.311 and 1.80(f)(4) of the Rules,[^20]
    Arnold Broadcasting Company, Inc. **IS LIABLE FOR A MONETARY
    FORFEITURE** in the amount of six thousand dollars (\$6,000) for its
    violation of Section 301 of the Act and Section 11.61(a)(2) of the
    Rules.

14. Payment of the 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.[^21] Payment may be made by
    mailing a check or similar instrument, payable to the order of the
    Federal Communications Commission, to the Federal Communications
    Commission, P.O. Box 73482, Chicago, Illinois 60673-7482. The
    payment should reference NAL/Acct. No. 200332800007 and FRN
    0006-1597-43. Requests for full payment under an installment plan
    should be sent to: Chief, Revenue and Receivables Group, 445 12th
    Street, S.W., Washington, D.C. 20554.[^22]

15. IT **IS FURTHER ORDERED** that a copy of this *Order* shall be sent
    by First Class and Certified Mail Return Receipt Requested to Arnold
    Broadcasting Company, Inc., P.O. Box 830, Sterling, Colorado 80751,
    and to its counsel, David Tillotson, Esq., Law Office of David
    Tillotson, 4606 Charleston Terrace, N.W., Washington DC 20007-1911.

FEDERAL COMMUNICATIONS COMMISSION

David H. Solomon

Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 301.

[^2]: 47 C.F.R. § 11.61(a).

[^3]: *Notice of Apparent Liability for Forfeiture*, File No.
    EB-02-DV-383, NAL/Acct. No. 200332800007 (released December 4,
    2002).

[^4]: The Commission's records indicate that Arnold filed an application
    for the STL on 948.0 MHz on July 16, 2002, one month after the
    agents inspected the station. The license was granted on October 23,
    2002, with an assigned call sign of WPWD551.

[^5]: The station logs also reflected that it received no required
    monthly EAS test ("RMT"). However, we note that the RMT for that
    time period was cancelled.

[^6]: The designated LP2 stations for KNEC are KATR(FM) or KRDZ(AM).

[^7]: *NAL* at ¶¶ 1, 8.

[^8]: Arnold's Response at page 2.

[^9]: 47 U.S.C. § 503(b).

[^10]: 47 C.F.R. § 1.80.

[^11]: 47 U.S.C. § 503(b)(2)(D).

[^12]: 47 U.S.C. § 301.

[^13]: 47.C.F.R. § 74.24(c).

[^14]: 47 C.F.R. § 74.24(d).

[^15]: *Eure Family Limited Partnership,* 17 FCC Rcd 21861, 21863-64
    (2002) (internal quotation marks omitted) and cases cited therein.

[^16]: *Stephen Paul Dunifer*, 11 FCC Rcd 718, 726 (1995).

[^17]: Arnold's Response, pages 3-4.

[^18]: See, e.g., *WWC License LLC Licensee of Microwave Stations
    WPJE660, WPJD256 and WPJA761, Kansas*, 16 FCC Rcd 19490 (2001); *New
    York Radio Service, WPTM988, Brooklyn, New York*, \-\-- FCC Rcd
    \-\-\--, DA 04-1720 (rel. June 18, 2004).

[^19]: 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 ...." *Southern California Broadcasting Co.*, 6 FCC Rcd
    4387 (1991). As provided by 47 U.S.C. § 312(f)(2), "\[t\]he term
    'repeated', when used with reference to the commission or omission
    of any act, means the commission or omission of such act more than
    once or, if such commission or omission is continuous, for more than
    one day." The *Conference Report* for Section 312(f)(2) indicates
    that Congress intended to apply this definition to Section 503 of
    the Act as well as Section 312. *See* H.R. Rep. 97^th^ Cong. 2d
    Sess. 51 (1982). *Southern California Broadcasting Co., supra.*

[^20]: 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).

[^21]: 47 U.S.C. § 504(a).

[^22]: *See* 47 C.F.R. § 1.1914.