**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | EB-04-IH-0382                |
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| **Caguas Educational TV, Inc.**  | ) | Facility ID No. 27292        |
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| Licensee of Noncommercial        | * | NAL/Account No. 200532080130 |
| Educational Station WLAZ(FM),    |   |                              |
| Kissimmee, Florida               | * | FRN 0008628646               |
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######### NOTICE OF APPARENT LIABILITY FOR FORFEITURE

**Adopted: March 17, 2005 Released: March 17, 2005**

By the Chief, Enforcement Bureau:

**I. INTRODUCTION**

1\. In this *Notice of Apparent Liability for Forfeiture* ("*NAL*"), we
find that Caguas Educational TV, Inc. ("Caguas"), licensee of
noncommercial educational Station WLAZ(FM), Kissimmee, Florida, has
apparently violated section 399B of the Communications Act of 1934, as
amended (the "Act"),[^1] and section 73.503 of the Commission\'s
rules,[^2] by willfully and repeatedly broadcasting prohibited
advertisements. Based upon our review of the facts and circumstances of
this case, we conclude that Caguas is apparently liable for a monetary
forfeiture in the amount of \$10,000.

**II. BACKGROUND**

2\. This case arises from a complaint made to the Commission in July
2004 ("*Complaint*"), alleging that noncommercial educational Station
WLAZ(FM) broadcast prohibited underwriting announcements during the
month of May 2004. Thereafter, the Bureau inquired of the licensee
concerning the allegations contained in the complaint.[^3] Caguas
responded to the *LOI* on November 22, 2004.[^4]

**III. DISCUSSION**

3\. Under section 503(b)(1) of the Act, any person who is determined by
the Commission to have willfully or repeatedly failed to comply with any
provision of the Act or any rule, regulation, or order issued by the
Commission shall be liable to the United States for a forfeiture
penalty.[^5] In order to impose such a penalty, the Commission must
issue a notice of apparent liability, the notice must be received, and
the person against whom the notice has been issued must have an
opportunity to show, in writing, why no such penalty should be
imposed.[^6] The Commission will then issue a forfeiture if it finds, by
a preponderance of the evidence, that the person has willfully or
repeatedly violated the Act or a Commission rule.[^7] As described in
greater detail below, we conclude under this procedure that Caguas is
apparently liable for a forfeiture in the amount of \$10,000 for its
apparent willful and repeated violations of the Commission's
underwriting rules.

A.  **Caguas Has Willfully and Repeatedly Broadcast Advertisements in
    Violation of Section 399B of the Act and Section 73.503 of the
    Commission's Rules**

4\. Advertisements are defined by the Act as program material broadcast
\"in exchange for any remuneration\" and intended to \"promote any
service, facility, or product\" of for-profit entities.[^8] The
pertinent statute specifically provides that noncommercial educational
stations may not broadcast advertisements.[^9] Although contributors of
funds to such stations may receive on-air acknowledgements, the
Commission has held that such acknowledgements may be made for
identification purposes only, and should not promote the contributors\'
products, services, or businesses.[^10] Specifically, such announcements
may not contain comparative or qualitative descriptions, price
information, calls to action, or inducements to buy, sell, rent or
lease.[^11] At the same time, however, the Commission has acknowledged
that it is at times difficult to distinguish between language that
promotes versus that which merely identifies the underwriter.
Consequently, the Commission expects only that licensees exercise
reasonable, "good faith" judgment in this area.[^12]

5\. At issue here are two underwriting announcements that Caguas admits
that Station WLAZ(FM) repeatedly broadcast from April 1 through
September 30, 2004.[^13] Caguas acknowledges that it received
consideration for airing the messages on behalf of the station's
underwriters, Sol De Borinquen Bakery and Wanda's Quality, that both are
for-profit entities, and that the two messages were repeated a total of
404 and 1267 times, respectively, during this period.[^14] Although
Caguas claims that it was under no "obligation" to broadcast
underwriting announcements on behalf of "Wanda's Quality," the licensee
represents that it did so as a "courtesy" to recognize the donor for
providing the station with giveaway items that it, in turn, used for
self-promotion.[^15]

6\. The announcements were broadcast in Spanish, and Caguas notes that
its own translation of the Sol de Borinquen Bakery announcement is
slightly different from that which the Bureau included with its
*LOI*.[^16] Having reviewed Caguas's version, we do not believe that it
substantially alters the overall context or meaning of the underwriting
message. However, we accept Caguas's alternate text insofar as it
represents the purported basis by which it claims to have attempted to
exercise its "good faith" discretion under *Xavier, supra*. Thus, we
have revised our attached transcripts to reflect Caguas's translation of
the Sol de Borinquen Bakery announcement.

7\. After careful review of the record in this case, we find that both
announcements apparently exceed the bounds of what is permissible under
section 399B of the Act, and the Commission's pertinent rules and
policies, in light of the "good faith" discretion afforded licensees
under *Xavier, supra*. The announcement for Wanda's Quality states that
the company has "the biggest variety of undershirts, polos, short and
long sleeve oxford shirts," and that they are "\[t\]he people that know
most about embroidery and printing."[^17] The announcement for Sol de
Borinquen Bakery asserts that it is "the greatest bakery in Kissimmee;"
and that it offers its "famous frappe."[^18] We conclude that a
noncommercial licensee, exercising "good faith," could only conclude
that the above statements make qualitative and comparative references to
Wanda's Quality and to Sol de Borinquen Bakery, and that, in particular,
the words and/or phrases "biggest," "people that know most," and
"greatest," impermissibly seek to distinguish the underwriters' products
and/or service favorably from that of their competitors. The
announcements are thus promotional and prohibited.[^19]

8\. We further find that the announcements in question were broadcast in
exchange for consideration. First, Caguas acknowledges that it aired the
announcements for Sol de Borinquen Bakery on the basis of one
announcement for each \$10 contributed.[^20] With respect to the
arrangement between Wanda's Quality and Caguas, "consideration," for
purposes of section 399B of the Act, may take forms other than direct
cash payments.[^21] Caguas admits that it aired the announcements to
acknowledge that underwriter's donation of t-shirts bearing the
station's logo, although it was not obligated to do so. In determining
whether the announcements constituted prohibited advertisements under
section 399B of the Act, it is sufficient to find that consideration was
exchanged for their broadcast, and that the announcements promoted the
services or products of for-profit entities.[^22] It is not necessary to
find that the licensee was contractually obligated to pay the
consideration. Finally, the Commission has long held licensees
responsible for ensuring that any material broadcast in a foreign
language conforms to the requirements of the Act and the Commission's
rules.[^23] To the extent that Caguas has overlooked its duties in this
regard, we remind it to take appropriate care in the future to avoid
further violations of this type.

**B. Proposed Action**

9\. Section 503(b) of the Act and section 1.80(a) of the Commission's
rules both state that any person who willfully or repeatedly fails to
comply with the provisions of the Act, the rules or Commission orders
shall be liable for a forfeiture penalty.[^24] The Commission's
*Forfeiture Policy Statement* sets a base forfeiture amount of \$2,000
for violation of the enhanced underwriting requirements.[^25] The
*Forfeiture Policy Statement* also provides that the Commission shall
adjust a forfeiture based upon consideration of the factors enumerated
in section 503(b)(2)(D) of the Act, such as "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."[^26]

10\. In this case, it appears that, from April 1 through September 30,
2004, Caguas willfully and repeatedly broadcast advertisements in
violation of section 399B of the Act and section 73.503(d) of the
Commission's rules. We believe that a substantial forfeiture is
necessary because of the substantial period of time during which it
aired the prohibited announcements, six months, and the 1,671 times that
it repeated the announcements during that period. Nevertheless, we
believe if we simply multiplied the \$2,000 base amount by the 1,671
apparent violations, the potential liability would be excessive in this
case. Based on all of the circumstances, and after examining forfeiture
actions in other recent underwriting cases, we believe that a proposed
forfeiture of \$10,000 is appropriate here.[^27]

11\. Accordingly, applying the *Forfeiture Policy Statement* and the
statutory factors to this case, we conclude that Caguas is apparently
liable for a forfeiture in the amount of \$10,000, for violating the
Commission's underwriting rules. We will not hesitate to take even
stronger enforcement action against noncommercial educational licensees
that engage in similarly serious violations of our underwriting
requirements.

**IV. ORDERING CLAUSES**

12\. In view of the foregoing, we conclude that a monetary sanction is
appropriate. Accordingly, pursuant to section 503(b) of the
Communications Act of 1934, as amended, and sections 0.111, 0.311 and
1.80 of the Commission's rules, Caguas Educational TV, Inc., licensee of
noncommercial educational Station WLAZ(FM), Kissimmee, Florida, is
hereby NOTIFIED of its APPARENT LIABILITY FOR A FORFEITURE in the amount
of \$10,000 for willfully and repeatedly broadcasting advertisements in
violation of section 399B of the Act, 47 U.S.C. § 399b, and section
73.503 of the Commission\'s rules, 47 C.F.R. § 73.503.

13\. IT IS FURTHER ORDERED, pursuant to section 1.80 of the Commission's
rules, that within thirty days of the release of this Notice, Caguas
SHALL PAY the full amount of the proposed forfeiture or SHALL FILE a
written statement seeking reduction or cancellation of the proposed
forfeiture.

14\. Payment of the forfeiture must be made by mailing a check or
similar instrument, payable to the order of the Federal Communications
Commission. The payment must include the NAL Acct. No. and FRN
referenced above. Payment by check or money order may be mailed to
Forfeiture Collection Section, Finance Branch, Federal Communications
Commission, P.O. Box 73482, Chicago, Illinois 60673-7482. Payment by
overnight mail may be sent to Bank One/LB 73482, 525 West Monroe, 8^th^
Floor Mailroom, Chicago, Illinois 60601. Payment by wire transfer may be
made to ABA Number 071000013, receiving bank Bank One, and account
number 1165259.

15\. The response, if any, must be mailed to William H. Davenport,
Chief, Investigations and Hearings Division, Enforcement Bureau, Federal
Communications Commission, 445 12^th^ Street, S.W, Room 4-C330,
Washington D.C. 20554 and MUST INCLUDE the NAL/Acct. No. referenced
above.

16\. The Commission will not consider reducing or canceling a forfeiture
in response to a claim of inability to pay unless the respondent
submits: (1) federal tax returns for the most recent three-year period;
(2) financial statements prepared according to generally accepted
accounting practices ("GAAP"); or (3) some other reliable and objective
documentation that accurately reflects the respondent's current
financial status. Any claim of inability to pay must specifically
identify the basis for the claim by reference to the financial
documentation submitted.

17\. Requests for payment of the full amount of this Notice of Apparent
Liability under an installment plan should be sent to: Chief, Revenue
and Receivables Operations Group, 445 12th Street, S.W., Washington,
D.C. 20554.[^28]

18\. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by
Certified Mail/Return Receipt Requested, to Caguas Educational TV, Inc.,
P.O. Box 3986, Carolina, Puerto Rico 00984-3986, and to its counsel,
Francisco R. Montero, Esq., and Alison J. Miller, Esq., Fletcher, Heald
& Hildreth, P.L.C., 11^th^ Floor, 1300 North 17^th^ Street, Arlington,
Virginia 22209-3801.

FEDERAL COMMUNICATIONS COMMISSION

David H. Solomon

> Chief, Enforcement Bureau

**[ATTACHMENT]{.underline}**

The following text was transcribed from underwriting announcements
broadcast over noncommercial educational Station WLAZ(FM), Kissimmee,
Florida.

*Wanda's Quality*

Attention, churches, schools and businesses! Already, in Orlando
embroidery and printing, Wanda's Quality! With the biggest variety of
undershirts, polos, short and long sleeve oxford shirts, in all sizes
for boys, ladies and gentlemen. Likewise, caps and promotional articles.
Wanda's Quality! Telephone 407-301-5854, 407-301-5854. Wanda's Quality!
The people that know the most about embroidery and printing. Wanda's
Quality. Sponsored by Genesis.

*Sol de Borinquen Bakery*

Sol de Borinquen has opened its doors, the greatest bakery in Kissimmee.
Sol de Borinquen Restaurant, 2510 Michigan Avenue. Breakfast, lunch,
authentic Caribbean food, the famous frappe, hot bread (sobao and
water). Wedding and birthday cakes, Caribbean style, cheese custard,
brazo Gitano and many other authentic Caribbean foods. Sol de Borinquen
Restaurant, 2510 Michigan Avenue, telephone 407-518-7755. Open from 6:00
a.m. Sol de Borinquen, an authentic Caribbean bakery.

[^1]: 47 U.S.C. § 399b.

[^2]: 47 C.F.R. § 73.503.

[^3]: Letter from William D. Freedman, Deputy Chief, Investigations and
    Hearings Division, Enforcement Bureau, to Caguas, dated October 7,
    2004 ("*LOI*").

[^4]: Letter from Francisco R. Montero, Esq., and Alison J. Miller,
    Esq., to Kenneth M. Scheibel, Jr., Attorney, Investigations and
    Hearings Division, Enforcement Bureau, dated November 22, 2004
    ("*Response*").

[^5]: 47 U.S.C. § 503(b)(1)(B); 47 C.F.R. § 1.80(a)(1); s*ee also* 47
    U.S.C. § 503(b)(1)(D) (forfeitures for violation of 14 U.S.C. §
    1464). Section 312(f)(1) of the Act defines willful as "the
    conscious and deliberate commission or omission of \[any\] act,
    irrespective of any intent to violate" the law. 47 U.S.C. §
    312(f)(1). The legislative history to section 312(f)(1) of the Act
    clarifies that this definition of willful applies to both sections
    312 and 503(b) of the Act, H.R. Rep. No. 97-765, 97^th^ Cong. 2d
    Sess. 51 (1982), and the Commission has so interpreted the term in
    the section 503(b) context. *See, e.g., Application for Review of
    Southern California Broadcasting Co.*, Memorandum Opinion and Order,
    6 FCC Rcd 4387, 4388 (1991) ("*Southern California Broadcasting
    Co.*"). The Commission may also assess a forfeiture for violations
    that are merely repeated, and not willful. *See, e.g.,* *Callais
    Cablevision, Inc., Grand Isle, Louisiana*, Notice of Apparent
    Liability for Monetary Forfeiture, 16 FCC Rcd 1359 (2001) (issuing a
    Notice of Apparent Liability for, *inter alia*, a cable television
    operator's repeated signal leakage). "Repeated" means that the act
    was committed or omitted more than once, or lasts more than one day.
    *Southern California Broadcasting Co.,* 6 FCC Rcd at 4388, ¶ 5;
    *Callais Cablevision, Inc.,* 16 FCC Rcd at 1362 ¶ 9.

[^6]: 47 U.S.C. § 503(b); 47 C.F.R. § 1.80(f).

[^7]: *See, e.g., SBC Communications, Inc*., Forfeiture Order, 17 FCC
    Rcd 7589, 7591 ¶ 4 (2002) (forfeiture paid).

[^8]: 47 U.S.C. § 399b(a).

[^9]: *Id*.

[^10]: *See* *In the Matter of the Commission Policy Concerning the
    Noncommercial Nature of Educational Broadcasting Stations*, Public
    Notice (1986), *republished*, 7 FCC Rcd 827 (1992) ("*Public
    Notice*").

[^11]: *Id*.

[^12]: *See Xavier University*, Letter of Admonition, issued November
    14, 1989 (Mass Med. Bur.), *recon. granted*, Memorandum Opinion and
    Order, 5 FCC Rcd 4920 (1990).

[^13]: *Response* at Exhibit A.

[^14]: *Id.* at 3, 4.

[^15]: *Id.* at 4. Caguas indicates that Wanda's Quality "from time to
    time" provided the station with t-shirts which bore the station's
    logo. *Id*.

[^16]: *Id.* at 2. Caguas does not dispute the translation of the
    Wanda's Quality announcement also contained in the *LOI*. *Id*.

[^17]: *See Attachment.*

[^18]: *Id.*

[^19]: *See Public Notice, supra*.

[^20]: *Response* at 4

[^21]: *See Commission Policy Concerning the Noncommercial Nature of
    Educational Broadcast Stations*, 90 FCC 2d 895, 911 (1982),
    *recon*., 97 FCC 2d 255 (1984) ("*Policy Statement*").

[^22]: Moreover, in similar cases, the Commission has rejected arguments
    that such payments constituted general station contributions
    unrelated to the broadcast of underwriting announcements made on
    behalf of the donors involved. *See Penfold Communications, Inc.*,
    Memorandum Opinion and Order, 13 FCC Rcd 23731 (Mass Media Bur.
    1998).

[^23]: *See Licensee Responsibility to Exercise Adequate Control Over
    Foreign Language Programs*, Public Notice, 39 FCC 2d 1037 (1973).

[^24]: *See* 47 U.S.C. § 503(b); 47 C.F.R § 1.80.

[^25]: *The Commission's Forfeiture Policy Statement and Amendment of
    Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines*,
    12 FCC Rcd 17087, 17115 (1997) ("*Forfeiture Policy Statement"*),
    *recon. denied* 15 FCC Rcd 303 (1999)*;* 47 C.F.R. § 1.80(b).

[^26]: 47 U.S.C. § 503(b)(2)(D). *See also Forfeiture Policy Statement*,
    12 FCC Rcd at 17100 ¶ 27.

[^27]: *See, e.g., Hispanic Broadcast System, Inc.(WQQZ(FM)),* Notice of
    Apparent Liability for Forfeiture, DA 05-349,\_\_FCC Rcd\_\_ (rel.
    Feb. 9, 2005) (\$10,000 forfeiture proposed for underwriting
    violations), *response pending*; *Minority Television Project, Inc.
    (KMTP-TV),* Notice of Apparent Liability for Forfeiture, DA
    05-348,\_\_FCC Rcd\_\_ (rel. Feb. 9, 2005) (\$7,500 forfeiture
    proposed for underwriting violations), *response pending*;
    *Christian Voice of Central Ohio, Inc.(WCVZ(FM)),* 19 FCC Rcd 23663
    (Enf. Bur. 2004) (\$20,000 forfeiture proposed for underwriting
    violations), *response pending*; *Minority Television Project, Inc.
    (KMTP-TV)*, Forfeiture Order, 18 FCC Rcd 26611 (Enf. Bur. 2003),
    *application for review denied*, Order on Review, 19 FCC Rcd 25116
    (2004) (\$10,000 forfeiture for underwriting violations), *recon.
    pending*.

[^28]: *See* 47 C.F.R. § 1.1914.