**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Petracom of Joplin, L.L.C. ) File No. EB-02-KC-782

Licensee of Station KCAR-FM ) NAL/Acct. No. 200332560006

Lutz, FL 33548 ) FRN 0005-0098-40

)

## FORFEITURE ORDER

**Adopted: April 2, 2004 Released: April 6, 2004**

By the Chief, Enforcement Bureau:

**I.** **INTRODUCTION**

1.  In this *Forfeiture Order* ("*Order*"), we issue a monetary
    forfeiture in the amount of three thousand, five hundred dollars
    (\$3,500) to Petracom of Joplin, L.L.C. ("Petracom"), licensee of
    station KCAR-FM, Galena, Kansas, for willful and repeated violations
    of Sections 11.61(a)(2)(i)(A) and 73.3526(a)(2) of the Commission's
    Rules ("Rules").[^1] The noted violations involve, respectively,
    Petracom's failure to conduct weekly Emergency Alert System ("EAS")
    tests and to include "issues/programs" lists in the station's public
    file.

2.  On December 12, 2002, the Commission's Kansas City, Missouri Field
    Office ("Kansas City Office") issued a *Notice of Apparent
    Liability* *for Forfeiture* ("*NAL*") [^2] in the amount of three
    thousand, five hundred dollars (\$3,500). Petracom filed a response
    to the *NAL* on January, 10, 2003.

**II.** **BACKGROUND**

3.  On November 7, 2002, a Commission agent from the Kansas City Office
    inspected the EAS installation and public file for radio station
    KCAR-FM. The operator on duty at the time of the inspection could
    not send an EAS test without instruction from the station's
    engineer. After such instruction and a successful EAS transmission,
    the agent inspected the EAS log. The agent found that the most
    recent log entry of an EAS test was dated July 22, 2002. The station
    manager admitted to the agent that the station had not conducted EAS
    tests since that date. The agent also found that the station's
    public file contained no "issues/programs" lists. The station
    manager told the agent that the station had no "issues/programs"
    lists, though Petracom had owned KCAR-FM for over two years. Based
    on the violations noted during the inspection, the Kansas City
    Office issued Petracom an *NAL* for the noted violations on December
    12, 2002. On January 10, 2003, Petracom submitted a response to the
    *NAL,* requesting cancellation of the forfeiture claiming that the
    violations resulted from employee error. Petracom also seeks
    cancellation based on remedial measures taken, an inability to pay,
    and a history of overall compliance.

**III.** **DISCUSSION**

4.  The proposed forfeiture amount in this case was assessed in
    accordance with Section 503(b) of the Communications Act of 1934, as
    amended ("Act"),[^3] Section 1.80 of the Rules,[^4] and *The
    Commission's Forfeiture Policy Statement and Amendment of Section
    1.80 of the Rules to Incorporate the Forfeiture Guidelines*
    ("*Policy Statement*")*.*[^5] In examining Petracom'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.[^6]

5.  Section 11.61(a)(2)(i)(A) of the Rules requires each AM, FM, and TV
    station to conduct tests of the EAS Header and End of Message Codes
    at least once a week at random days and times. KCAR-FM's EAS log
    showed, and the station manager's admission confirmed, that KCAR-FM
    failed to conduct the required weekly EAS tests from July 22, 2002
    to November 7, 2002. The field agent's test of the EAS equipment
    showed it to be fully operational. Petracom, therefore,
    willfully[^7] and repeatedly[^8] failed to conduct the required
    tests pursuant to 11.61(a)(2)(i)(A) of the Rules.

6.  Section 73.3526(a)(2) of the Rules requires each commercial AM and
    FM radio station to comply with Section 73.3526(e)(12), which in
    turn requires each station to include in its public inspection file,
    every three months, a list of programs that have provided the
    station's most significant treatment of community issues during the
    preceding three-month period. This "issues/programs" list is
    required to be filed in the station's public inspection file by the
    tenth day of the succeeding calendar quarter, and the list should be
    retained in the station's public inspection file until the
    Commission takes final action on the station's next license renewal
    application. The Commission's field agent found no "issues/programs"
    lists in KCAR-FM's public inspection file. The station manager told
    the field agent that there were no "issues/programs" lists, even
    though Petracom had owned the station for at least two years.
    Petracom, therefore, willfully and repeatedly violated Section
    73.3526(a)(2) by not maintaining "issues/programs" lists in
    KCAR-FM's public inspection file.

7.  In its response to the *NAL*, Petracom asserts that, because the
    KCAR-FM station manager regularly certified to Petracom that the
    station was in compliance with all Commission rules, Petracom
    exercised proper diligence in monitoring its station and the
    Commission should cancel Petracom's forfeiture. Such monitoring of
    and certification by employees does not warrant cancellation of the
    forfeiture. "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."[^9]

8.  Petracom states in its response that, upon receiving the *NAL*,
    Petracom terminated the former KCAR-FM station manager, implemented
    new procedures to ensure compliance with Commission rules, and
    corrected KCAR-FM's violations. While commendable, these measures
    also do not warrant cancellation of the forfeiture. As the
    Commission stated in *Seawest Yacht Brokers*, "corrective action
    taken to come into compliance with Commission rules or policy is
    expected, and does not nullify or mitigate any prior forfeitures or
    violations."[^10]

9.  Also in its *NAL* response, Petracom cites financial hardship as a
    reason why the Commission should cancel the forfeiture. Petracom
    submits copies of its financial statements for fiscal years 2000 and
    2001 in support of its claim of inability to pay the proposed
    forfeiture amount.[^11] Though prepared in accordance with Generally
    Accepted Accounting Practices ("GAAP"), the balance sheets Petracom
    provides do not give an accurate picture of the company's finances,
    because the balance sheets do not include gross receipts.[^12] Even
    if Petracom had provided its gross receipts, that would not
    necessarily be sufficient for us to evaluate Petracom\'s ability to
    pay the forfeiture. The entity before us in this proceeding is a
    subsidiary of Petracom Media, L.L.C, which owns three broadcasting
    companies. We must look to the totality of the circumstances
    surrounding Petracom's ability to pay the forfeiture. The

parent company's ability to pay, therefore, is relevant in evaluating
the subsidiary company's ability to pay the forfeiture.[^13] The
Commission would need to see tax returns or GAAP-prepared balance sheets
showing gross receipts from the parent company to determine Petracom's
ability to pay.[^14] Because Petracom has not provided adequate
information to enable us to evaluate its financial condition, we are
unable to cancel or reduce the forfeiture based on Petracom's claim of
an inability to pay.[^15]

10. Petracom's final argument for canceling the forfeiture is its claim
    of a history of overall compliance. We do not think that Petracom is
    entitled to such a reduction, however. Though the Commission has
    taken no prior action against Petracom, the Commission has acted
    against one of Petracom's sister companies, Petracom of Texarkana,
    L.L.C. On May 2, 2003, the Commission's Dallas, Texas Field Office
    issued an *NAL* to Petracom of Texarkana, L.L.C. as licensee of FM
    Station KPGG, Dallas, Texas, for a violation of Section 11.35(a) of
    the Rules (also an EAS violation).[^16] Petracom of Texarkana L.L.C.
    is also a subsidiary of Petracom Media, L.L.C. When a parent or
    sister company has previously received notice of a violation from
    the Commission, it is as if the company at issue has received the
    notice, and the company at issue will not qualify for a reduction
    based on a history of overall compliance.[^17] We therefore reject
    Petracom's claim for a reduction based on a history of overall
    compliance.

11. We have examined Petracom'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
    Petracom willfully and repeatedly violated Sections
    11.61(a)(2)(i)(A) and 73.3526(a)(2) of the Rules and that
    cancellation or reduction of the proposed \$3,500 monetary
    forfeiture is not warranted.

####  IV. ORDERING CLAUSES

12. Accordingly, **IT IS ORDERED THAT**, pursuant to Section 503(b) of
    the Act[^18], and Sections 0.111, 0.311 and 1.80(f)(4) of the
    Rules[^19], Petracom of Joplin, L.L.C. **IS LIABLE FOR A MONETARY
    FORFEITURE** in the amount of three thousand, five hundred dollars
    (\$3,500) for willfully and repeatedly violating Sections
    11.61(a)(2)(i)(A) and 73.3526(a)(2) of the Rules. For collection,
    the Commission will file a proof of claim at the appropriate time in
    Petracom's bankruptcy action.[^20]

13. IT IS FURTHER ORDERED that a copy of this *Order* shall be sent by
    Certified Mail Return Receipt Requested to Petracom of Joplin,
    L.L.C. at 1527 N. Dale Mabry Hwy, Suite 105, Lutz, FL 33548, and to
    Petracom's counsel, M. Scott Johnson, Gardner, Carton & Douglas,
    1301 K St., N.W., Suite 900, East Tower, Washington D.C. 20005.

FEDERAL COMMUNICATIONS COMMISSION

David H. Solomon

Chief, Enforcement Bureau

[^1]: 47 C.F.R. §§ 11.61(a)(2)(i)(A) and 73.3526(a)(2).

[^2]: *Notice of Apparent Liability of Forfeiture*, NAL/Acct. No.
    200332560006 (Enf. Bur., Kansas City Office, released December 12,
    2002).

[^3]: 47 U.S.C. § 503(b).

[^4]: 47 C.F.R. § 1.80.

[^5]: 12 FCC Rcd 17087 (1997), *recon. denied*, 15 FCC Rcd 303 (1999)
    \[hereinafter *Policy Statement*\] .

[^6]: 47 U.S.C. § 503(b)(2)(D).

[^7]:
    > 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 ...." *See Southern California Broadcasting Co.*, 6 FCC Rcd
    > 4387 (1991).

[^8]: As provided by 47 U.S.C. § 312(f)(2), a continuous violation is
    "repeated" if it continues 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). *See Southern
    California Broadcasting Company*, *supra* at 4388.

[^9]: *See, e.g. Eure Family Limited Partnership*, 17 FCC Rcd 21861,
    21863-64 (2002) (internal quotation marks omitted) and cases cited
    therein.

[^10]: *See* 9 FCC Rcd 6099 (1994). *See also Callais Cablevision,
    Inc.,* 17 FCC Rcd 22626, 22629 (2002); *Radio Station KGVL, Inc.,*
    42 FCC 2d 258, 259 (1973); and *Executive Broadcasting Corp*., 3 FCC
    2d 699, 700 (1966).

[^11]: *See Policy Statement*, *supra* note 5 at 17158 (stating that the
    "Commission has the flexibility to consider any documentation
    \[e.g., balance sheets, profit/loss statement certified by the
    licensee\] that it considers probative, objective evidence of the
    violator\'s inability to pay a forfeiture") (brackets were
    parentheses in original)*.*

[^12]: *See PJB Communications of Virginia, Inc.*, 7 FCC Rcd 2088, 2089
    (1992) (finding gross receipts a "very useful yardstick in helping
    to analyze a company's financial condition for forfeiture
    purposes"). *See also In re Alpine Broadcasting, Station KKIT*, 17
    FCC Rcd. 18242, 18244 (Enf. Bur. 2002) (stating, "the best
    indication of a company\'s ability to pay a forfeiture amount is its
    gross receipts").

[^13]: *See In the Matter of KASA Radio Hogar, Inc.,* 17 FCC Rcd 6256,
    6258-59 (2002) (finding no reduced forfeiture despite a claim of
    inability to pay, because the licensee was a subsidiary of a company
    with the financial means to pay the forfeiture).

[^14]: *See id.* at 6257.

[^15]: The FCC has received notice that Petracom has filed for Chapter
    11 bankruptcy. However, the filing for bankruptcy does not
    necessarily preclude the imposition of a forfeiture. *See* 11 U.S.C.
    § 362(b); *see also United States v. Commonwealth Companies, Inc.*,
    913 F.2d 518, 522-26 (8^th^ Cir. 1990) (excepting from bankruptcy
    imposed stays, suits by government to obtain monetary judgment for
    past violations of the law); *Coleman Enterprises, Inc.*, 15 FCC Rcd
    24385, 24389 notes 27-28 (2000), *recon. denied*, 16 FCC Rcd 10016
    (2001) (noting that a bankruptcy filing does not preclude the
    Commission from assessing forfeitures for violations of the Act and
    Rules). Moreover, the filing for bankruptcy does not necessarily
    justify an adjustment or cancellation of the forfeiture amount for a
    violation of the Rules. *See Adelphi Communications,* 18 FCC Rcd
    7652, 7654 ¶ 8 (Enf. Bur. 2003) (finding that a Chapter 11
    bankruptcy filing \-- alone, without financial documentation \--
    does not support an inability to pay claim and thus does not provide
    a basis to adjust or cancel an assessed forfeiture); *see also North
    American Broadcasting Co., Inc.*, 19 FCC Rcd 2754 ¶ 6 (Enf. Bur.
    2004); *Pinnacle Towers, Inc.*, 18 FCC Rcd 16365, 16366-67 ¶ 7 (Enf.
    Bur. 2003); *Friendship Cable of Texas, Inc.*, 17 FCC Rcd 8571,
    8572-73 ¶ 9 (Enf. Bur. 2002).

[^16]: *See Notice of Apparent Liability of Forfeiture*, NAL/Acct. No.
    200333500006 (Enf. Bur., Dallas, Texas Office, released May 2,
    2003).

[^17]: *See In re Mega Communications of St. Petersburg, Licensee,
    L.L.C.* 16 FCC Rcd 15948, 15949 (Enf. Bur. 2001) (denying a
    subsidiary's claim of history of overall compliance because the
    Commission had issued eight NOVs to parent and sister companies).
    *See* *also In the Matter of Rio Grande Transmission, Inc.* 16 FCC
    Rcd 17040, 17042-43 (Enf. Bur. 2001) (imposing a forfeiture against
    a subsidiary \$13,000 for a tower-related violation and rejecting
    the subsidiary's claim of history of overall compliance because the
    Commission had previously issued six prior NOVs against the parent
    company for tower-related violations).

[^18]: 47 U.S.C. § 503(b).

[^19]: 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).

[^20]: *See* Col*eman Enterprises, Inc*., *supra* at 24390. *See also
    Commonwealth, supra* at 523 note Error: Reference source not found.