**Before the**

**FEDERAL COMMUNICATIONS COMMISSION**

**Washington, D.C. 20554**

In the Matter of )

)

Bay Broadcasting Corporation ) NAL Acct. No. 915PO0001

)

Licensee, KHSN(AM) )

Coos Bay, Oregon )

Facility ID \# 4082 )

)

Former Licensee, KACW(FM) )

North Bend, Oregon )

Facility ID \# 5210 )

)

Former Licensee, KBBR(AM) )

North Bend, Oregon )

Facility ID \# 5212 )

)

Former Licensee, KOOS(FM) )

North Bend, Oregon )

Facility ID \# 4080 )

)

Former Licensee, K299AA )

North Bend/Coos Bay, Oregon )

Facility ID \# 5211 )

######### FORFEITURE ORDER

**Adopted:** April 26, 2000 **Released:** April 27, 2000

By the Chief, Enforcement Bureau:

1\. This Forfeiture Order ("Order") imposes a forfeiture against Bay
Broadcasting Corporation ("Bay") in the amount of nineteen thousand
dollars (\$19,000). We conclude that Bay willfully and repeatedly
violated Section 301 of the Communications Act of 1934, as amended (the
"Act"), and Sections 73.1201, 73.1675, 73.1690 and 74.1251 of the
Commission's rules.[^1] The violations include: operation without
Commission authorization of studio-transmitter links ("STL") for
stations KHSN(AM), Coos Bay, and KACW(FM) and KBBR(AM), both in North
Bend, all in Oregon; failure to broadcast required station
identification announcements on Station KHSN(AM); use without Commission
authorization of a long wire antenna for KHSN(AM); relocation without
Commission authorization of the transmitter and transmitter line for
KHSN(AM) and of FM translator station K299AA.

**BACKGROUND**

2\. Following receipt of a complaint from Robert King, a former employee
of Bay, the resident agent of the Commission's Portland Field Office
conducted an inspection of the captioned stations. The inspection
disclosed numerous violations of the rules, including: those noted
above; failure to make appropriate entries in station records concerning
EAS required weekly and monthly tests (47 C.F.R. § 11.61(b)); reliance
on an inoperable telephone dial-up remote control for KHSN(AM) (47
C.F.R. § 73.1350(c)); and failure to post antenna registration numbers
at the towers for KACW(FM) and KBBR(AM) (47 C.F.R. § 17.4). Following
issuance of a Notice of Violation ("NOV") on April 21, 1999, and review
of the licensee's response, the Portland Field Office, on August 24,
1999, issued a Notice of Apparent Liability ("NAL") to Bay, which
proposed a forfeiture of \$19,000. The NAL cited the violations noted in
paragraph one of this Order.

3\. In response to the NAL,[^2] Bay concedes the occurrence of the
violations. Nevertheless, Bay requests a substantial reduction in the
forfeiture. Bay believes that its prior record, small business status,
presence in a small market, and inability to pay the proposed forfeiture
without substantial hardship warrant reduction of the forfeiture.

**DISCUSSION**

4\. Section 503(b)(2)(D) of the Act directs us to consider two distinct
matters in determining the appropriate amount of a forfeiture.[^3]
First, as to the violations, we must take into account their nature,
circumstances, extent, and gravity. Second, with respect to the
violator, we must consider the degree of culpability, history of prior
offenses, ability to pay, and such other matters as justice may require.

5\. The record before us reflects that Bay relocated two transmitters
and operated three others without Commission authorization. The
unauthorized moves and/or operations began at various times between July
1997 and August 1998. Bay also violated the terms of its license for
KHSN(AM) by using an unauthorized antenna beginning in July 1997. Bay
acknowledges that the violations occurred largely because it sought to
save money by taking the actions noted. Bay claims it was going to seek
Commission approval at a later undetermined time; however, it did not do
so until after it received the NOV. Moreover, even subsequent to the
issuance of the NOV, Bay continued to operate all of the referenced
transmitters, and, in the case of KHSN(AM), used the unauthorized
antenna up to the dates when either Commission authorization occurred
or, in the case of Station K299AA, the violation was corrected.[^4] As
for the failure to broadcast station identification announcements on
KHSN(AM) over a two-day period, Bay indicates that the violations
occurred because it did not adequately monitor a malfunctioning software
computer system that was supposed to insert commercials as well as
station identifications.

6\. After considering the above, we conclude that all of the violations
were willful and repeated. In this regard, the term "willful" means that
the violator knew that it was taking the action in question,
irrespective of any intent to violate the Commission's rules,[^5] while
"repeated" means more than once.[^6] In addition, we find that the
unauthorized moves and use of the unauthorized antenna were not only
continuous but also intentional in that those violations continued even
after Bay knew that its operations were at variance with the Act, the
Commission's rules, and its licenses.[^7] In this regard, it bears
repeating that a licensee cannot legally engage in the activity that it
wishes the Commission to authorize until it receives approval to do
so.[^8]

7\. In mitigation, we note that, prior to the violations cited in the
NAL, Bay and its sole owner, Laurence Goodman, had a history of overall
compliance, dating back to December 1989. Further, it appears that Bay's
stations are licensed to relatively small-market communities, a factor
that has served as a basis for reducing a proposed forfeiture.[^9]
However, we believe the nature, circumstances, extent and gravity of the
violations, as described above, and the culpability of Bay more than
offset any mitigation that would be appropriate for these factors.

8\. Bay argues that additional mitigation is warranted in light of its
status as a "small business," pursuant to the Small Business Regulatory
Enforcement Fairness Act of 1996 ("SBREFA").[^10] We disagree. A radio
broadcasting entity qualifies as a "small business" if its annual
receipts are less than five million dollars. 13 C.F.R. § 121.201 (Major
Group 48, SIC Code 4832). Annual receipts for businesses more than three
years old are determined by totaling the entity's gross income for the
three most recent fiscal years and dividing by three. 13 C.F.R. §
121.104. Bay's federal income tax returns for 1996-1998 demonstrate that
it should be considered a "small business." Notwithstanding such status,
however, Bay is not entitled to a reduction of the proposed forfeiture.
The Commission has previously indicated that Section 503(b) of the
Act[^11] and the Commission's policies and precedent, as supplemented by
the

[Forfeiture Policy Statement]{.underline}, comply with SBREFA.[^12] We
find no basis for reduction of the forfeiture based on these policies
and precedents. The discovery of Bay's violations was unrelated to its
participation in a compliance assistance or audit program, and Bay's
subsequent actions do not warrant a conclusion that Bay undertook good
faith efforts to comply with the law. In this regard, Bay continued to
operate its unauthorized facilities during the pendency of its
applications for licenses and its STA request. Considering such
operations and the circumstances that led Bay to violate the Act and
rules in the first instance (*see* para. 5, *supra*), we conclude that
its violations were willful, which militates against reduction or
cancellation of the proposed forfeiture.[^13] *See* [Forfeiture Policy
Statement]{.underline}, *supra* note 3, 12 FCC Rcd at 17109. Also, as
discussed *infra*, we conclude that Bay has the ability to pay the
proposed forfeiture. Accordingly, a reduction of the forfeiture because
of Bay's status as a small business is not warranted.

9\. Finally, Bay contends that it is unable to pay a \$19,000
forfeiture, notwithstanding its sale of KACW(FM), KBBR(AM), KOOS(FM) and
K299AA, and the impending sale of KHSN(AM). Again, we disagree. Our
analysis of Bay's financial condition leads us to conclude that, even
prior to the sale of KHSN(AM), Bay has the wherewithal to pay the
proposed forfeiture. In this regard, Commission records reflect that the
sale of Bay's stations, except KHSN(AM), was consummated on September
24, 1999. According to Bay, it received \$475,000 in cash, which was
reduced immediately by payments of \$382,364 to creditors. Bay's alleged
remaining debts, which include \$150,000 in current and anticipated
expenses and a note payable of \$107,000 appear to be covered by cash on
hand plus a note receivable of \$375,000 from the buyer of Bay's former
stations. Moreover, once the sale of KHSN(AM) is consummated, Bay will
have additional resources which appear more than sufficient to retire
any existing debt, including the forfeiture.[^14] The cases cited by
Bay, both of which involved a reduction in a proposed forfeiture, are
inapposite.[^15] Unlike the licensees therein, Bay is capable of paying
the forfeiture. Moreover, as discussed above, Bay continued to operate
illegally long after it had been explicitly advised that its operations
regarding the STLs, KHSN(AM) and K299AA were unauthorized.

10\. After taking all of the foregoing into account, we conclude that
the recommended \$19,000 forfeiture should not be reduced. The
seriousness and duration of Bay's violations, when coupled with its
culpability, offset Bay's overall history and market situation. Further,
neither Bay's small business status nor its asserted inability to pay
warrants reduction or cancellation of the forfeiture. The forfeiture is
appropriate and should be imposed.

#### **ORDERING CLAUSES**

11\. Accordingly, IT IS ORDERED THAT, pursuant to Section 503(b) of the
Act[^16], and Sections 0.111, 0.311 and 1.80(f)(4) of the Commission\'s
rules[^17], Bay Broadcasting Corporation IS LIABLE FOR A MONETARY
FORFEITURE in the amount of nineteen thousand dollars (\$19,000). The
forfeiture is imposed for willful and repeated violations of Section 301
of the Act and Sections 73.1201, 73.1675, 73.1690 and 74.1251 of the
Commission's rules.[^18] Among other things, those provisions proscribe
operation of unlicensed transmitters; certain modifications to
transmission systems without prior Commission approval; and omission of
station identification announcements.

12\. Payment of the forfeiture shall be made in the manner provided for
in Section 1.80 of the Commission's rules[^19] 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.[^20] 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 No. referenced above
(915PO0001). Requests for full payment under an installment plan should
be sent to: Chief, Credit and Debt Management Center, 445 12th Street,
S.W., Washington, D.C. 20554.[^21]

13\. IT IS FURTHER ORDERED that copies of this Forfeiture Order shall be
sent by Certified Mail Return Receipt Requested to Bay Broadcasting
Corporation at P.O. Box 180, Coos Bay, Oregon 97420 and to its counsel,
Howard J. Braun, Esq. at Rosenman & Colin, LLP, 805 15^th^ Street, N.W.,
9^th^ Floor, Washington, D.C. 20005-2212.

FEDERAL COMMUNICATIONS COMMISSION

David H. Solomon

Chief, Enforcement Bureau

[^1]: 47 U.S.C. § 301; 47 C.F.R. §§ 73.1201, 73.1675, 73.1690, and
    74.1251.

[^2]: Bay submitted its response on September 30, 1999 and supplemented
    it on October 6, 1999, and March 10, 2000.

[^3]: ^?^ 47 U.S.C. § 503(b)(2)(D). *See also* [In the Matter of the
    Commission's Forfeiture Policy Statement and Amendment of Section
    1.80 of the Rules to Incorporate the Forfeiture
    Guidelines]{.underline}, 12 FCC Rcd 17087, 17100-01 (1997), *recon.
    denied*, 15 FCC Rcd 303 (1999) ("[Forfeiture Policy
    Statement]{.underline}").

[^4]: ^?^ The Commission granted Bay's STL applications for KACW(FM),
    KBBR(AM) and KHSN(AM) on June 30, 1999. Bay relocated the
    transmitter for K299AA to its licensed site on July 27, 1999.
    Finally, although Bay, by letter dated June 15, 1999, sought special
    temporary authorization ("STA") for KHSN(AM)'s relocation and long
    wire antenna, STA was not granted by the Mass Media Bureau until
    April 5, 2000.

[^5]: ^?^ *See* [Jerry Szoka]{.underline}, 14 FCC Rcd 9857, 9865 (1999);
    [Southern California Broadcasting Co.]{.underline}, 6 FCC Rcd 4387
    (1991).

[^6]: ^?^ *See* [Hale Broadcasting Corp.]{.underline}, 79 FCC 2d 169,
    171 (1980).

[^7]: ^?^ *See* [Supervalu, Inc.]{.underline}, DA 00-235 (Enf. Bur.,
    released February 9, 2000).

[^8]: ^?^ *See* [SouthEast Telephone Inc.]{.underline}, DA 00-325 (Enf.
    Bur., released February 22, 2000); [Andres Santos]{.underline}, 14
    FCC Rcd 6192, 6194-95 (Compl. & Inf. Bur. 1999).

[^9]: ^?^ *See, e.g.,* [Benito Rish]{.underline}, 10 FCC Rcd 2861, 2862
    (1995), where the Commission reduced a forfeiture from \$10,000 to
    \$2,500 in large part because the station in question was a 5,000
    watt daytime-only station in a community of 425, thereby suggesting
    an inherently low station value.

[^10]: ^?^ Pub. L. 104-121, 110 Stat. 858 (1996).

[^11]: ^?^ 47 U.S.C. § 503(b).

[^12]: ^?^ *See* [Forfeiture Policy Statement]{.underline}, *supra* note
    3, 12 FCC Rcd at 17109.

[^13]: ^?^ Citing [Bronco Broadcasting Co., Inc.]{.underline}, 13 FCC
    Rcd 9422 (Comp. & Inf. Bur. 1999), Bay argues that its small
    business status, standing alone, should warrant reduction of the
    forfeiture. We disagree. As we have discussed above, application of
    the Communications Act and Commission policy and precedent, which
    reflect SBREFA, to Bay and its actions does not justify or require a
    reduction of its forfeiture.

[^14]: ^?^ According to records supplied by Bay, it is contracted to
    receive \$150,000 for the sale of KHSN(AM), consisting of \$25,000
    cash at closing and a note receivable of \$125,000.

[^15]: ^?^ *See* [Eddie Bond]{.underline}, 13 FCC Rcd 12526 (Mass Media
    Bur. 1998), *recon. granted* 14 FCC Rcd 5070 (Mass Media Bur. 1999)
    (reduction of forfeiture from \$15,000 to \$5,000 to \$1,500 based
    on showing that former licensee had a "limited, fixed income"); and
    [Gureckis, Michael A.]{.underline}, 13 FCC Rcd 21757 (Compl. & Inf.
    Bur. 1998) (following review of documents related to its ability to
    pay and the results of two inspections subsequent to the NAL, which
    demonstrated that "considerable expenditures" had been made to come
    into compliance, a proposed forfeiture was reduced from \$8,500 to
    \$1,500). Bay also cites [Morradio, Inc.]{.underline}, 14 FCC Rcd
    5201 (Compl. & Inf. Bur. 1999) and contends that although the
    proposed forfeiture of \$4,000 for an unauthorized transmitter move
    was not reduced, forfeitures for other apparent violations were not
    proposed. Although Bay suggests that the Bureau's decision in
    [Morradio]{.underline} not to propose forfeitures for all possible
    violations should be followed here, we note that the NAL issued to
    Bay did not include all of the violations uncovered during the
    inspection and referenced in the NOV. Consequently, we perceive no
    reason to reduce Bay's forfeiture because of [Morradio]{.underline}.

[^16]: ^?^ 47 U.S.C. § 503(b).

[^17]: ^?^ 47 C.F.R. §§ 0.111, 0.311, 1.80(f)(4).

[^18]: ^?^ 47 U.S.C. § 301; 47 C.F.R. §§ 73.1201, 73.1675, 73.1690, and
    74.1251.

[^19]: ^?^ 47 C.F.R. § 1.80.

[^20]: ^?^ 47 U.S.C. § 504(a).

[^21]: ^?^ *See* 47 C.F.R. § 1.1914.