Before the

**Federal Communications Commission**

# Washington, D.C. 20554

In the Matter of ) )

**ENTERGY SECURITY CORPORATION** ) File No. 920EF0059

)

Operator of Fixed Microwave Service Stations )

WNEP492 and WNEH696 in Metarie and New )

Orleans, Louisiana )

**[NOTICE OF APPARENT LIABILITY FOR FORFEITURE]{.underline}**

**Adopted: September 30, 1999** **Released: October 1, 1999**

By the Chief, Enforcement and Consumer Information Division,

Wireless Telecommunications Bureau:

## I. Introduction

1.  This is a Notice of Apparent Liability for Forfeiture pursuant to
    Section 503(b) of the Communications Act of 1934, as amended,[^1]
    and 1.80 of the Commission's Rules,[^2] against Entergy Security
    Corporation ("Entergy"), operator of Fixed Microwave Service station
    licenses WNEP492 and WNEH696 at Metarie and New Orleans, Louisiana.
    We find that Entergy acquired control of these two stations without
    prior Commission consent, in apparent violation of Section 310(d) of
    the Act[^3] and Section 101.53 of the Commission's Rules.[^4] For
    the reasons discussed below, we conclude that Entergy is apparently
    liable for a forfeiture in the amount of \$12,000.

## II. Background

2.  In 1997, Entergy, a wholly-owned subsidiary of Entergy
    Corporation,[^5] was engaged in "the business of providing remote
    alarm monitoring services . . . utiliz\[ing\] telephone landlines
    and/or wireless facilities to receive, process and transmit
    emergency and other information."[^6] Entergy merged with Armor
    Systems, Inc. ("Armor"), another alarm monitoring service provider,
    and the parties "closed the transaction on October 15, 1997."[^7]
    Prior to the merger, the stations in question were licensed to
    Armor.[^8] Entergy Corporation's total operating revenues were
    \$11.495 billion in 1998 and \$9.562 billion in 1997.[^9]

3.  Entergy acquired control of the two stations as a result of the
    October 1997 merger. On January 4, 1999, Entergy filed FCC Form 415
    to assign Armor's two stations to Entergy.[^10] Entergy also filed a
    request for special temporary authority ("STA") to operate the
    stations during the pendency of the assignment application.[^11] In
    response to a Commission letter[^12] seeking more information
    regarding the assignment, Entergy explained that the merger "had
    inadvertently closed without prior FCC approval because of their
    \[Armor's and Entergy's\] unfamiliarity with the approval
    requirement."[^13] Entergy further stated that it "did not learn of
    the prior approval requirement resulting from the merger until
    approached about a subsequent transaction[^14] involving an
    acquisition of the merged entity."[^15] The Commission granted the
    STA on January 15, 1999. Entergy's assignment application is
    pending.

## 

## III. Discussion

4.  Section 310(d) of the Communications Act[^16] provides in pertinent
    part:

> No construction permit or station license, or any rights thereunder,
> shall be transferred,
>
> assigned, or disposed of in any manner, voluntarily or involuntarily,
> directly or indirectly,
>
> or by transfer of control of any corporation holding such permit or
> license, to any person
>
> except upon application to the Commission and upon finding by the
> Commission that the
>
> public interest, convenience, and necessity will be served thereby.

This section was codified for fixed microwave services at Section
101.53(a) of the Commission's Rules.[^17]

5.  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 or the Rules shall be
    liable for a forfeiture penalty.[^18] For purposes of Section 503(b)
    of the Communications Act, the term "willful" means that the
    violator knew it was taking the action in question, irrespective of
    any intent to violate the Commission's rules.[^19] For purposes of
    computing a forfeiture under Section 503(b)(1) of the Act, each day
    of a continuing violation is considered a separate violation,[^20]
    and a violation is repeated if it occurs more than once.[^21]

6.  Entergy was required to obtain Commission consent prior to the
    assignment of Armor's licenses to Entergy. Indeed, Entergy
    acknowledges that it "did not obtain the required approval in
    advance" of the merger.[^22] Entergy thus failed to comply with
    Section 310(d) of the Act[^23] and Section 101.53 of the
    Commission's Rules[^24] when it merged with Armor without prior
    Commission consent, which resulted in a de facto assignment of
    Armor's licenses. It also appears that Entergy engaged in a
    substantial transfer of control by acquiring the licenses through
    the merger. Entergy's unauthorized control of Armor's licenses began
    on October 17, 1997, and continued until at least January 4, 1999, a
    period spanning more than fourteen months. Based on the evidence
    before us, we find that Entergy engaged in the unauthorized
    assignment and apparent substantial transfer of control of the two
    stations licensed to Armor, in apparent willful and repeated
    violation of Section 310(d) of the Communications Act[^25] and
    Section 101.53 of the Commission's Rules.[^26]

7.  The Commission's Forfeiture Policy Statement, which became effective
    October 14, 1997, sets a base forfeiture amount of \$8,000 for an
    unauthorized substantial transfer of control.[^27] The *Forfeiture
    Policy Statement* also specifies that the Commission shall adjust a
    forfeiture based upon consideration of the factors enumerated in
    Section 503(b)(2)(D) of the Communications Act,[^28] 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."[^29] Additionally, the Commission has stated its
    intent "to take into account the subject violator's ability to pay
    in determining the amount of a forfeiture to guarantee that
    forfeitures issued against large or highly profitable entities are
    not considered merely an affordable cost of doing business."[^30] As
    an initial matter, we note that an unauthorized substantial transfer
    of control is a serious violation of the Act and the Commission's
    rules. In this case, we also note that the violation involved two
    stations and continued for over fourteen months, which constitute
    aggravating factors. Furthermore, Entergy's apparent ability to pay
    a forfeiture warrants a substantial forfeiture. As for mitigating
    factors, we note Entergy's voluntary disclosure of its violation and
    the nature of the services involved. Thus, taking into consideration
    all the factors required by Section 503(b)(2)(D) of the Act,
    including, but not limited to, the nature of the stations in
    question, the gravity of the violation, the duration of the
    unauthorized assignment and apparent substantial transfer of
    control, Entergy's presumed ability to pay, and Entergy's voluntary
    disclosure of its violations to the Commission, we believe the
    appropriate forfeiture is \$12,000.

## IV. ORDERING CLAUSES

8.  ACCORDINGLY, IT IS ORDERED pursuant to Section 503(b) of the
    Communications Act of 1934, as amended,[^31] and Section 1.80 of the
    Commission's Rules,[^32] that Entergy Security Corporation is hereby
    NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the amount of
    twelve thousand dollars (\$12,000) for willfully and repeatedly
    violating Section 310(d) of the Communications Act of 1934, as
    amended,[^33] and Section 101.53 of the Commission's Rules.[^34]

9.  IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's
    Rules,[^35] that within thirty days of the release of this Notice,
    Entergy SHALL PAY[^36] to the United States the full amount of the
    proposed forfeiture or SHALL FILE a written statement seeking
    reduction or cancellation of the proposed forfeiture.

10. IT IS FURTHER ORDERED that a copy of this Notice shall be sent, by
    Certified Mail/Return Receipt Requested, to Entergy\'s counsel,
    John A. Prendergast, Esq., Blooston, Mordkofsky, Jackson & Dickens,
    2120 L Street, N.W., Washington, D.C. 20037.

FEDERAL COMMUNICATIONS COMMISSION

Catherine W. Seidel

> Chief, Enforcement and Consumer Information Division Wireless
> Telecommunications Bureau

[^1]: 47 U.S.C. § 503(b).

[^2]: 47 C.F.R. § 1.80.

[^3]: 47 U.S.C. § 310(d).

[^4]: 47 C.F.R. § 101.53(a). That rule was replaced by Section 1.948 of
    the Commission's Rules on February 12, 1999. *In the Matter of
    Biennial Review -- Amendment of Parts 0, 1, 13, 22, 24, 26, 27, 80,
    87, 90, 95, 97, and 101 of the Commission's Rules to Facilitate the
    Development and Use of the Universal Licensing System in the
    Wireless Telecommunications Services*, 13 FCC Rcd 21027 (1998).
    Section 101.53 is applicable here because Entergy filed its
    authorization request prior to the February 12, 1999 effective date.

[^5]: *See Application of Sonitrol Southeast, Inc. for a Determination
    of Exempt Telecommunications Status Under Section 34 of the Public
    Utility Holding Company Act of 1935, as Added by Section 103 of the
    Telecommunications Act of 1996*, 12 FCC Rcd 10429 (OGC 1997).

[^6]: *Application of Entergy ETHC Merger Company for a Determination of
    Exempt Telecommunications Status Under Section 34 of the Public
    Utility Holding Company Act of 1935, as Added by Section 103 of the
    Telecommunications Act of 1996*, 12 FCC Rcd 10427, 10428 (OGC 1997).
    *See also* Letter Dated June 15, 1999, from Glenn L. Schroeder,
    Authorized Employee of Entergy at the Time of Merger, to Sharon C.
    Bowers, Informal Complaints & Public Inquiry Branch, Federal
    Communications.

[^7]: Letter Dated June 15, 1999, from Glenn L. Schroeder, Authorized
    Employee of Entergy at the Time of Merger, to Sharon C. Bowers,
    Informal Complaints & Public Inquiry Branch, Federal Communications
    Commission.

[^8]: *See* Application for Authorization for Microwave Services,
    Exhibit, filed January 4, 1999, by Entergy Security.

[^9]: *See* Standard & Poor's Standard Corporation Descriptions, Volume
    59, No. 2, p. 2495 (1998).

[^10]: *See* Application for Authorization in the Microwave Services
    filed January 4, 1999, by Entergy Security.

[^11]: *See* Request for STA, filed January 14, 1999, by Entergy.

[^12]: *See* Letter Dated May 17, 1999 from Sharon C. Bowers, Chief,
    Informal Complaints & Public Inquiry Branch, Enforcement & Consumer
    Information Division, Wireless Telecommunications Bureau, to John A.
    Prendergast of Blooston, Mordkofsky, Jackson & Dickens, counsel for
    Entergy.

[^13]: Letter dated June 15, 1999, from Glenn L. Schroeder, Authorized
    Employee of Entergy at the Time of Merger, *supra*.

[^14]: *See* Application for Authorization in the Microwave Services
    filed January 4, 1999 by ADT Security Services, Inc., for assignment
    of stations WNEP492 and WNEH696 from Entergy to ADT. This
    application is currently pending.

[^15]: Letter dated June 15, 1999, from Glenn L. Schroeder, Authorized
    Employee of Entergy at the Time of Merger, *supra*.

[^16]: 47 U.S.C. § 310(d).

[^17]: 47 C.F.R § 101.53(a).

[^18]: *See* 47 U.S.C. § 503(b) and 47 C.F.R. § 1.80(a).

[^19]: *See Southern California Broadcasting Co*., FCC Rcd 4387 (1991).

[^20]: *See Eastern Carolina Broadcasting, Inc*., 6 FCC Rcd 6154, 6155
    (1991).

[^21]: *See Hale Broadcasting Corp*., 79 FCC 2d 169, 171 (1980).

[^22]: Letter dated June 15, 1999, from Glenn L. Schroeder, Authorized
    Employee of Entergy at the Time of Merger, *supra.*

[^23]: 47 U.S.C. § 310(d).

[^24]: 47 C.F.R. § 101.53.

[^25]: 47 U.S.C. § 310(d).

[^26]: 47 U.S.C. § 101.53.

[^27]: *The Commission's Forfeiture Policy Statement and Amendment of
    Section 1.80 of the Commission's Rules*, 12 FCC Rcd 17087, 17113
    (1997) (*Forfeiture Policy Statement)*.

[^28]: *Id*. at 17110.

[^29]: 47 U.S.C. § 503(b)(2)(D).

[^30]: *Forfeiture Policy Statement, supra*, 12 FCC Rcd at 17099.

[^31]: 47 U.S.C. § 503(b).

[^32]: 47 C.F.R. § 1.80.

[^33]: 47 U.S.C. § 310(d).

[^34]: 47 C.F.R. § 101.53.

[^35]: 47 C.F.R. § 1.80.

[^36]: Payment may be made by credit card through the Commission\'s
    Billings and Collections Branch 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 file number of this proceeding.