**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

**In the Matter of** )

)

**KNFL, Inc.** ) File No. EB-99-DV-025

Tremonton, Utah )

) **NAL/Acct. No. 915DV0003**

**FORFEITURE ORDER**

**Adopted:** April 12, 2000 **Released:** April 13, 2000

By the Chief, Enforcement Bureau:

# I. INTRODUCTION

1\. In this Forfeiture Order ("Order"), we issue a monetary forfeiture
in the amount of sixteen thousand dollars (\$16,000) against KNFL, Inc,
("KNFL"), licensee of station KNFL(FM), Tremonton, Utah, for willful and
repeated violation of Section 301 of the Communications Act of 1934, as
amended ("Act").[^1] The noted violation involves operation of a radio
station without a license.

2.  On July 2, 1999, the Commission's Denver, Colorado, Field Office
    ("Denver Office") issued the referenced Notice of Apparent Liability
    ("NAL") for a monetary forfeiture in the amount of sixteen thousand
    dollars (\$16,000) to KNFL for the noted violations.[^2] KNFL filed
    a response to the NAL on August 2, 1999. For the reasons discussed
    below, we affirm the forfeiture.

    **II. BACKGROUND**

3\. On October 21, 1998, the Denver Office received information
indicating that an unauthorized FM translator station operating on the
frequency 105.1 MHz was rebroadcasting the signal of KNFL(FM), which is
authorized to transmit on frequency 104.9 MHz. On the same day, agents
from the Denver Office contacted KNFL(FM)'s general manager, Morgan
Skinner, by telephone. Morgan Skinner admitted that the KNFL(FM) signal
was being rebroadcasted by an FM translator station operating on 105.1
MHz. In response to the agents' request for further information about
the translator station, Morgan Skinner sent the Denver Office a letter
dated October 21, 1998. In that letter, Morgan Skinner admitted that
\"KNFL \[Inc.\] purchased the translator, antenna and coaxial cable and
had it installed." On November 12, 1998, an agent from the Denver Office
informed Morgan Skinner by telephone that his letter contained no
information establishing KNFL's authority to operate an FM translator on
105.1 MHz, and warned him that he must cease operation of the FM
translator station unless he provided evidence of an authorization.
Morgan Skinner stated that he would contact his attorney and have the
appropriate information faxed to the agent, but the agent never received
such information.

4\. On March 16, 1999, agents from the Denver Office detected an FM
translator station on 105.1 MHz in Logan, Utah, which was rebroadcasting
the signal of KNFL(FM). The agents went to the main studio for KNFL(FM)
in Logan, Utah, where Steve Skinner (Morgan Skinner's brother) was in
charge of the station's operation. Steve Skinner readily admitted that
KNFL was operating an FM translator station on 105.1 MHz. At the request
of the agents, Steve Skinner terminated the FM translator\'s operation.

5\. On July 2, 1999, the District Director, Denver Office, issued the
subject NAL to KNFL in the amount of \$16,000 for the unauthorized
operation of the FM translator station in repeated and willful violation
of Section 301 of the Act. The Denver Office noted the following in
issuing the NAL: as of March 16, 1999, KNFL had no authorization pending
for the operation of the FM translator; in light of its several years of
experience in the broadcast industry and the six broadcast stations that
it operated in Utah, KNFL should be familiar with the Commission's
regulations governing broadcast station licenses; KNFL continued to
operate the FM translator after being verbally notified that it had no
authorization to operate the FM translator; and KNFL's operation of the
FM translator would not be permitted by Section 74.1232(e) of the
Commission's Rules ("Rules"),[^3] which prohibits an FM station from
providing financial support to an FM translator that would extend the FM
station's protected contour.

6\. On August 2, 1999, the Commission received KNFL's response to the
NAL, in which KNFL requests cancellation or reduction of the proposed
forfeiture. KNFL admits that, until March 16, 1999, it operated an FM
translator station in the Logan, Utah, area on frequency 105.1 MHz and
that this operation was "a technical violation of the rules." KNFL
asserts that, until November 20, 1998, it held a construction permit
allowing it to operate KNFL(FM) on 105.1 MHz.[^4] KNFL presents several
arguments for cancellation or reduction of the proposed forfeiture.
First, KNFL contends that two incorrect factual conclusions "served as
underpinnings" for the proposed forfeiture. According to KNFL, these are
the determination that the coverage of the FM translator operated by
KNFL extended beyond the protected contour of KNFL(FM) and the
determination that KNFL had not requested an authorization to operate
the translator.[^5] Second, KNFL argues that the base amount used for
calculation of the proposed forfeiture should have been \$10,000 rather
than \$11,000. Third, KNFL asserts that it qualifies for a reduction
under each of the downward adjustment factors specified in the
Guidelines for Assessing Forfeitures.[^6] These factors are: minor
violation, good faith or voluntary disclosure, history of overall
compliance, and inability to pay. KNFL claims its violations are minor
because the FM translator station operated within KNFL(FM)'s protected
signal contour, apparently did not interfere with authorized
transmissions, and did not cause harm to the public. With respect to
"good faith or voluntary disclosure," KNFL argues that it was
"forthcoming and honest in its dealings with the Commission . . . its
principals responded to all inquiries . . . and even sought the grant of
an emergency STA as soon as the legality of its operation was
questioned." KNFL contends that it has a history of overall compliance
because it has not previously been assessed a forfeiture. Finally, KNFL
claims it is unable to pay the proposed forfeiture and submits financial
statements from 1996, 1997, and 1998 to support that claim. The
financial statements, which are marked "unaudited" and do not contain a
certification of their correctness, indicate that KNFL's gross revenues
were \$56,387 in 1996, \$80,888 in 1997 and \$119,654 in 1998.

**III. DISCUSSION**

7\. As the NAL explicitly states, the forfeiture amount in this case was
assessed in accordance with Section 503 of the Act,[^7] Section 1.80 of
the Rules,[^8] 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*, FCC 99-407, (rel.
Dec. 28, 1999) ("*Policy Statement*"). In examining KNFL'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 other such matters as justice may require.
47 U.S.C. § 503(b)(2)(D).

8\. Section 301 of the Act prohibits radio operation without an
authorization from the Commission. Neither KNFL's formerly held
construction permit for a primary station nor its request for an STA
confers any authority to operate an FM translator station on 105.1 MHz.
*See Southeast Telephone, Inc*., DA 00-325 (Enforcement Bureau 2000),
and *WRHC Broadcasting Corp*., DA 00-619 (Enforcement Bureau 2000). We
conclude that KNFL's operation of a translator station on the frequency
105.1 MHz between October 21, 1998, and March 16, 1999, was without
authorization and, therefore, in repeated and willful violation of
Section 301 of the Act.

9\. We agree with KNFL that the proper base amount for the forfeiture is
\$10,000 rather than \$11,000. However, as indicated below, this does
not affect the ultimate forfeiture amount.

10\. We reject KNFL's argument that the forfeiture amount should be
reduced because incorrect factual conclusions "served as underpinnings"
for the proposed forfeiture. As a Commission licensee, KNFL is on notice
that it must comply with the Rules and the Act. In this case, KNFL
received a specific warning from the Commission and chose to disregard
that warning by continuing to operate an unauthorized FM translator
station after the warning. This egregious conduct fully justifies
increasing the forfeiture from the base amount of \$10,000 to \$16,000.
The issue of whether KNFL requested an authorization to operate the
translator is irrelevant in this case, since the mere filing of an
application does not constitute authority to operate. Moreover, whether
the FM translator's signal extended beyond KNFL(FM)'s protected contour
is also irrelevant to the issue of whether KNFL repeatedly and willfully
violated Section 301 of the Act. Therefore, we need not consider the
"factual conclusions" questioned by KNFL.

11\. In addition, we reject KNFL's arguments that the proposed
forfeiture should be mitigated on the basis of the four downward
adjustment factors specified by the Guidelines for Assessing
Forfeitures. Because of the extended duration of KNFL's violations and
their continuance after a warning, we cannot classify those violations
as "minor." Further, nothing in the record justifies a reduction based
on a claim of good faith or voluntary disclosure or a history of overall
compliance. As to the fourth factor, the NAL informed KNFL that claims
of inability to pay should be supported by tax returns or other
financial statements prepared under generally accepted accounting
procedures for the most recent three-year period.[^9] *See Barry A.
Stevenson*, 12 FCC Rcd 1976, 1977 (Compl. & Inf. Bur. 1997); *Morradio
Inc*., 14 FCC Rcd at 5201, 5203-04 (Compl. & Inf. Bur. 1999). KNFL
supplied financial statements, which are marked "unaudited" and do not
contain any certification of their correctness. Furthermore, we cannot
determine from the information available that these financial statements
were prepared under generally accepted accounting procedures. We, thus,
are unable to establish the reliability of KNFL's financial statements
and cannot consider them. Therefore, we cannot determine that KNFL is
unable to pay the proposed forfeiture.

12\. We have examined KNFL'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 KNFL has failed to
justify cancellation or reduction of the proposed forfeiture amount.
Therefore, we affirm the forfeiture of sixteen thousand dollars
(\$16,000).

# IV. 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,[^10]
KNFL, Inc., **IS LIABLE FOR A MONETARY FORFEITURE** in the amount of
sixteen thousand (\$16,000) for the repeated and willful violation of
Section 301 of the Act, which prohibits unlicensed radio operation.

14 Payment of the forfeiture shall be made in the manner provided for in
Section 1.80 of the Rules within thirty (30) days of the release of this
Order. If the forfeiture is not paid within the specified period, the
case may be referred to the Department of Justice for collection
pursuant to Section 504(a) of the Act.[^11] Payment may be made by
credit card through the Commission's Credit and Debt Management Center
at (202) 418-1995 or 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 note the NAL/Acct. No. 915DV0003. Requests for full
payment under an installment plan should be sent to: Chief, Credit and
Debt Management Center, 445 12^th^ Street, S.W., Washington, D.C. 20554.

15\. **IT IS FURTHER ORDERED** that a copy of this Order shall be sent
by certified mail, return receipt requested, to counsel for KNFL, Inc.,
Dan J. Alpert, 2120 N. 21^st^ Road, Suite 400, Arlington, Virginia
22201.

**FEDERAL COMMUNICATIONS COMMISSION**

David H. Solomon

Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 301.

[^2]: *Notice of Apparent Liability*, NAL Acct. No. 915DV0003 (Compl. &
    Inf. Bur., Denver Office, Released July 2, 1999).

[^3]: 47 C.F. R. § 74.1232(e).

[^4]: The construction permit for operation on 105.1 MHz was superseded
    on November 20, 1998, when the Commission granted an application to
    modify the license for KNFL(FM).

[^5]: According to the Commission's records, on November 30, 1998, KNFL
    filed a request with the Commission for special temporary authority
    ("STA") to operate an FM translator station on frequency 105.1 MHz
    to serve the Logan, Utah, community. The Commission has not acted on
    that STA request because it is affected by a freeze upon the
    granting of certain broadcast applications. The purpose of the
    freeze is to permit the orderly filing of applications following the
    opening of an auction window. *See Implementation of Section 309(j)
    of the Communications Act \-- Competitive Bidding for Commercial
    Broadcast and Instructional Fixed Television Service Licenses,* 12
    FCC Rcd. 22363 (1997), para. 61.

[^6]: *See* Note to Section 1.80(b)(4) of the Rules, 47 C.F.R. §
    1.80(b)(4).

[^7]: 47 U.S.C. § 503(b).

[^8]: 47 C.F.R. § 1.80.

[^9]: *NAL* at note 3.

[^10]: 47 C.F.R. §§ 0.111, 0.311 and 1.80(f)(4).

[^11]: 47 U.S.C. § 504(a).