Before the

**Federal Communications Commission**

# Washington, D.C. 20554

In re Notices of Apparent Liability for Forfeitures of ) )

**EMERY TELEPHONE** )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0020

KNKO305, Castle Dale, Utah )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0022

KNKM777, Castle Dale, Utah )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0023

KNKM779, Orangeville, Utah )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0024

KNKO304, Ferron, Utah )

)

Licensee of Rural Telephone Service Station ) File No. 316MS0025

KNKO306, Emery, Utah )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0026

KNKO307, Horn Mountain, Utah )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0027

KNKO767, Horn Mountain, Utah )

)

Licensee of Rural Radiotelephone Service Station ) File No. 316MS0028

KNKO786, Horn Mountain, Utah )

**[MEMORANDUM OPINION AND ORDER]{.underline}**

**Adopted: October 4, 1999** **Released: October 7, 1999**

By the Commission:

## I. INTRODUCTION

1.  In this order, we dismiss in part and deny in part a Petition for
    Reconsideration ("Petition") filed on November 30, 1998, by Emery
    Telephone (\"Emery\"), licensee of the above-captioned stations.
    Emery seeks reconsideration of an October 29, 1998, Commission
    *Memorandum Opinion and Order*[^1] denying Emery\'s Application for
    Review of a September 15, 1995, action[^2] of the Wireless
    Telecommunications Bureau imposing a \$10,000 forfeiture against
    Emery for multiple violations of Section 22.9(b)(1) of the
    Commission\'s Rules.[^3] For the reasons discussed below, we dismiss
    Emery\'s Petition to the extent it raises arguments previously
    considered and otherwise deny the Petition.

## II. BACKGROUND

2.  On June 2, July 25, and July 26, 1994, the Mobile Services Division
    of the Common Carrier Bureau issued eight Notices of Apparent
    Liability for Forfeiture against Emery for its failure to file FCC
    Forms 489 prior to placing eight authorized frequencies into
    operation.[^4] The Common Carrier Bureau found that Emery apparently
    had committed eight separate violations of Section 22.9(b)(1) of the
    Commission\'s Rules.[^5] The Notices of Apparent Liability proposed
    forfeitures totaling \$32,000.[^6] On August 25, 1994, Emery filed a
    consolidated response requesting that the Common Carrier Bureau
    rescind or reduce the forfeiture. On September 15, 1995, the
    then-newly created Enforcement and Consumer Information Division of
    the Wireless Telecommunications Bureau, which was given jurisdiction
    over this matter, denied the request to rescind the forfeiture; the
    Bureau, however, did reduce Emery's forfeiture liability.[^7] The
    Bureau reassessed the forfeiture primarily because of the July 12,
    1994, decision of the United States Court of Appeals, which vacated
    the Commission's then-prevailing forfeiture policy guidelines.[^8]
    Relying on both the statutory guidelines enumerated in Section
    503(b)(2)(D) of the Communications Act of 1934, as amended,[^9] and
    the Commission's decision in *AllCity Paging, Inc.*,[^10] the Bureau
    reduced Emery's forfeiture from \$32,000 to \$10,000.

3.  On October 16, 1995, Emery filed an Application for Review with the
    Commission seeking rescission or further reduction of the
    forfeiture. In its Application for Review, Emery argued that its
    failure to file Forms 489 constituted a single violation;[^11] that
    the Bureau had failed to consider all the factors required under
    Section 503(b)(2)(D) of the Act;[^12] and that a \$10,000 forfeiture
    would be punitive and threaten Emery's ability to provide Basic
    Exchange Telephone Radio Service ("BETRS").[^13] On October 29,
    1998, the Commission denied Emery's Application for Review and
    affirmed the \$10,000 forfeiture.[^14] The Commission found that
    Emery had indeed committed multiple violations;[^15] that the Bureau
    had not failed to "take into account Emery's unique circumstances
    when it relied on *AllCity*;"[^16] and that the \$10,000 forfeiture
    would not threaten Emery's ability to serve the public.[^17] On
    November 30, 1998, Emery filed the instant Petition for
    Reconsideration.

##### III. DISCUSSION

4.  Emery sets forth three arguments in its Petition. Emery argues that
    a \$10,000 forfeiture is "misplaced and unjustified" because Emery's
    failure to file Forms 489 was minor and did not adversely impact the
    Commission's spectrum management responsibilities.[^18] Emery also
    argues that the Commission misapplied *Canby Telephone Cooperative
    Association*, 5 FCC Rcd 731 (Com. Car. Bur. 1990), in affirming the
    Bureau's use of Emery's gross revenues in reassessing the
    forfeiture.[^19] According to Emery, a proper application of *Canby*
    would have limited the Bureau's consideration of Emery's ability to
    pay the forfeiture to Emery's BETRS revenues only.[^20]
    Additionally, Emery claims that the denial of its Application for
    Review was arbitrary and capricious because the Commission failed to
    apply an alleged policy of forbearing from prosecuting stale
    forfeiture actions.[^21] Emery notes that "similarly situated
    applicants and licensees must be treated in the same manner."[^22]
    Citing three cases[^23] in which the Commission cancelled
    forfeitures issued during the 1992-1994 timeframe, Emery concludes
    that the Commission must likewise cancel Emery's forfeiture.[^24]

5.  Section 1.106(b)(2) of the Commission rules provides in relevant
    part that:

> Where the Commission has denied an application for review, a petition
> for
>
> reconsideration will be entertained only if . . . the petition relies
> on facts which
>
> relate to events which have occurred or circumstances which have
> changed since
>
> the last opportunity to present such matters . . . or the petition
> relies on facts unknown
>
> to the petitioner until after his last opportunity to present such
> matters which could not,
>
> through the exercise of due diligence, have been learned prior to such
> opportunity.[^25]

If the petitioner fails to introduce relevant new facts or changed
circumstances, however, the Commission may dismiss the petition for
reconsideration as repetitious, pursuant to Section 1.106(b)(3) of the
Commission's Rules.[^26]

6.  Emery has not introduced new facts or shown that changed
    circumstances warrant reconsideration. Two of Emery's three
    arguments \-- that its failure to file Forms 489 was a minor
    violation and that a \$10,000 forfeiture is unfair in light of the
    *Canby* case \-- have previously been considered and rejected by the
    Commission. With respect to the first argument, contrary to Emery's
    claim, the Bureau did acknowledge the relatively minor nature of
    Emery's violations. In assessing the initial forfeiture amount, the
    Mobile Services Division expressly noted that "failing to file an
    FCC Form 489 is a relatively minor violation."[^27] Furthermore, in
    reassessing the forfeiture, the Bureau followed the guidelines
    contained in Section 503(b) of the Act and considered "the nature,
    circumstances, extent, and gravity of the violation."[^28] The
    Commission thus found that "the forfeiture amount determined in
    Emery is the product of a review of the appropriate statutory
    factors described in Section 503(b)(2)(D)," which includes
    consideration of the gravity, i.e. relative importance or
    seriousness, of the violation.[^29] Emery's current argument that
    the Bureau failed to consider the minor nature of the violation is
    therefore unfounded.

7.  Similarly, we have previously considered and rejected Emery's
    contention that the Commission misapplied *Canby* in affirming the
    Bureau's consideration of Emery's gross revenues. In its Application
    for Review, Emery argued that a \$10,000 forfeiture could jeopardize
    its ability to serve the public.[^30] Emery relied on *Canby*, a
    1990 staff order, to support this argument.[^31] In denying Emery's
    Application for Review, however, we specifically held that "Emery's
    reliance on *Canby* *Telephone* is misplaced,"[^32] because Emery
    had not demonstrated that the forfeiture would threaten its ability
    to serve the public. Section 503(b)(2)(D) requires us to consider a
    licensee's "ability to pay" in determining an appropriate forfeiture
    amount.[^33] Here, both before the Bureau and in the instant
    petition for reconsideration, Emery has consistently and explicitly
    stated that it is *not* claiming an inability to pay.[^34] As we
    noted in the *Application for Review Order*, "the Commission
    considers a company's ability to serve the public *and* pay the
    forfeiture."[^35] Citing our post-*Canby* ruling in *PJB
    Communications of Virginia, Inc*.,[^36] a 1992 Commission order, we
    confirmed that the Commission "use\[s\] gross revenues as a
    yardstick to assess the company's financial condition."[^37] We thus
    concluded that, given Emery's gross revenues of \$3,626,897 and
    \$4,085,666 for 1994 and 1995, respectively, Emery had failed to
    demonstrate how a \$10,000 forfeiture would threaten its ability to
    serve the public.[^38] Consistent with our holding in *PJB*, we will
    not find that a forfeiture will threaten a licensee's financial
    ability to serve the public unless a comparison of the forfeiture
    amount with the licensee's gross revenues shows that such a threat
    exists. Given Emery's disclaimer that it is not claiming an
    inability to pay, Emery has not demonstrated that payment of the
    forfeiture threatens its ability to serve the public. The Commission
    already has considered and rejected Emery's argument that a \$10,000
    forfeiture is excessive or unfair. Consequently, we dismiss the
    petition for reconsideration with respect to these two arguments.

8.  Emery's remaining argument -- that the Commission's refusal to
    cancel its forfeiture amounts to selective prosecution and, thus, is
    arbitrary and capricious -- lacks merit. The Commission has
    routinely issued forfeitures for failure to file Form 489.[^39]
    Moreover, given the circumstances in this case, the amount of this
    forfeiture is consistent with forfeitures imposed in other
    cases.[^40] As we stated in our *Application for Review Order*,
    "\[w\]e rely on this notification in fulfilling our electromagnetic
    spectrum management functions. The Form 489 is thus a tool of
    spectrum management in that it informs us of whether the facility
    has been built and the frequency is in use."[^41] The Commission
    continues to require licensees to notify us when a station has been
    constructed and put into operation.[^42] There is thus nothing
    arbitrary or capricious about continued enforcement of this
    forfeiture.

9.  As for the three cases Emery cites regarding the Commission's
    alleged policy of cancelling stale forfeitures, none of these cases
    requires the cancellation of Emery's forfeiture. In *MobileComm*,
    one of the cases Emery cites, the Commission canceled several
    notices of apparent liability due to a combination of factors:
    then-recent rule changes; the dismantling of a tower; and the time
    period that had elapsed since the issuance of the underlying
    forfeitures.[^43] None of the factors cited in *MobileComm* is
    present here. The Commission has not changed its notification
    requirements, there has been no change in the material facts
    underpinning the violation, and there was no significant passage of
    time between the date of issuance of the notices of apparent
    liability and the date of issuance of the forfeiture order. As for
    the other two cases upon which Emery relies -- *Thomas J. & Nancy A.
    McIlraith* and *Crista Ministries --* the Commission cancelled those
    forfeitures due to the passage of time and "recent rule changes in
    some of the services at issue." [^44] Given the number of Emery's
    violations, the timely issuance of a forfeiture order, and the fact
    that the Commission continues to require notification of the
    commencement of service, we decline to cancel the forfeiture in this
    instance.

10. The Commission is a regulatory agency with broad prosecutorial
    discretion in enforcement proceedings.[^45] To establish that the
    Commission has abused its prosecutorial discretion, Emery would have
    to show that the Commission has engaged in "outrageous conduct that
    offends fundamental fairness and shocks the universal sense of
    justice,"[^46] or that prosecution is based on impermissible
    factors, such as race or religion.[^47] Emery's recitation of
    cancelled forfeitures does not meet the heavy burden required to
    sustain a charge of selective prosecution and thus fails to persuade
    us that its forfeiture should be cancelled. We therefore deny this
    part of the Petition for Reconsideration.

**IV. CONCLUSION AND ORDERING CLAUSES**

11. For the reasons stated above, we conclude that Emery has failed to
    present new facts or changed circumstances, or otherwise provided
    sufficient reason to warrant reconsideration of our denial of
    Emery's Application for Review. We thus affirm our prior *Memorandum
    Opinion and Order* assessing a forfeiture of \$10,000 against Emery.

12. ACCORDINGLY, IT IS ORDERED, pursuant to Section 1.106 of the
    Commission\'s Rules,[^48] that the Petition for Reconsideration
    filed November 30, 1998, by Emery IS DISMISSED to the extent that
    Emery raises arguments previously considered and is otherwise
    DENIED.

13. IT IS FURTHER ORDERED that a copy of this Memorandum Opinion and
    Order SHALL BE SENT via certified mail, return receipt requested, to
    Emery's counsel, Blooston, Mordkofsky, Jackson & Dickens, 2120 L
    Street NW, Washington, DC 20037.

FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

[^1]: *Emery Telephone*, 13 FCC Rcd 23853 (1998) (*Application for
    Review Order*).

[^2]: *Emery Telephone*, 10 FCC Rcd 10012 (Wireless Tel. Bur. 1995)
    (*Forfeiture Order*).

[^3]: 47 C.F.R. § 22.9(b)(1). That rule provided: "Notification of
    status of facilities (FCC Form 489). When construction has been
    completed in accordance with the radio station authorization, the
    licensee shall so notify the Commission using Form 489. Licensees
    can commence service the day Form 489 is placed in the mail to the
    FCC." Section 22.9(b)(1) was the applicable rule in effect when the
    NALFs were issued. On February 12, 1999, we reorganized our rules.
    The notice requirement provided in former Section 22.9(b)(1) now
    appears in Section 1.946(d) of the Commission\'s Rules. *See In the
    Matter of the Biennial Regulatory 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
    Service in the Wireless Telecommunications Services*, 13 FCC Rcd
    21027 (1998).

[^4]: *See Emery Telephone*, 9 FCC Rcd 3566 (Com. Car. Bur. 1994);
    *Emery Telephone*, 9 FCC Rcd 3565 (Com. Car. Bur. 1994); *Emery
    Telephone*, 9 FCC Rcd 3564 (Com. Car. Bur. 1994); *Emery Telephone*,
    9 FCC Rcd 3563 (Com. Car. Bur. 1994); *Emery Telephone*, 9 FCC Rcd
    3562 (Com. Car. Bur. 1994); *Emery Telephone*, 9 FCC Rcd 3561 (Com.
    Car. Bur. 1994); *Emery Telephone*, 9 FCC Rcd 3560 (Com. Car. Bur.
    1994); *Emery Telephone*, 9 FCC Rcd 3524 (Com. Car. Bur. 1994)
    (collectively, *NALS*).

[^5]: 47 C.F.R. § 22.9(b)(1).

[^6]: *See* *NALS*.

[^7]: *See Forfeiture Order*, 10 FCC Rcd at 10012-10013.

[^8]: *Id*., 10 FCC Rcd at 10013.

[^9]: 47 U.S.C. § 503(b)(2)(D).

[^10]: *AllCity Paging, Inc*., 9 FCC Rcd 6485 (1994).

[^11]: Application for Review (filed October 16, 1995) at 5-7.

[^12]: *Id*. at 7-13, 18-20.

[^13]: *Id*. at 13-17.

[^14]: *Application for Review Order*, 13 FCC Rcd at 23860.

[^15]: *Id*. at 23856-23857.

[^16]: *Id*. at 23857.

[^17]: *Id*. at 23859.

[^18]: Petition for Reconsideration (filed November 30, 1998) at 5-6.

[^19]: *Id*. at 7-10.

[^20]: *Id*.

[^21]: *Id*. at 3-5.

[^22]: *Id*. at 3.

[^23]: *Id*. at 2-5. *See Thomas J. and Nancy A.. McIlraith*, 12 FCC Rcd
    14999 (1997); *MobileComm of Virginia*, 13 FCC Rcd 21594 (1998), and
    *Crista Ministries, Inc*., 13 FCC Rcd 21598 (1988).

[^24]: *Id*. at 2-5.

[^25]: 47 C.F.R. § 1.106(b)(2).

[^26]: 47 C.F.R. § 1.106(b)(3).

[^27]: *See NALS*.

[^28]: *See Forfeiture Order*, 10 FCC Rcd at 10013.

[^29]: *See Application for Review Order*, 13 FCC Rcd at 23857-23858.

[^30]: *See* Application for Review (filed October 16, 1995) at 17.

[^31]: *Id*.

[^32]: *Application for Review Order*, 13 FCC Rcd at 23859.

[^33]: 47 U.S.C. § 503(b)(2)(D).

[^34]: *See* Letter dated August 19, 1996, from Harold Mordkofsky and
    Richard D. Rubino, Emery's counsel, to Howard C. Davenport, Chief,
    Enforcement Division, Wireless Telecommunications Bureau. *See also*
    Petition for Reconsideration (filed November 30, 1998) at 7.

[^35]: *Application for Review Order*, 13 FCC Rcd at 23859 (emphasis
    added).

[^36]: *PJB Communications of Virginia, Inc*., 7 FCC Rcd 2088 (1992).

[^37]: *Application for Review Order*, 13 FCC Rcd at 23859.

[^38]: *Id*. at 23860.

[^39]: *See, e.g., Mulzer Enterprises, Inc.,* DA 99-1275 (Wireless Tel.
    Bur. rel. June 29, 1999)(\$2,000 forfeiture for one violation);
    *Courtesy Communications, Inc*., 14 FCC Rcd 4198 (1999)(\$4,500
    forfeiture for three violations); *Ronan Telephone Company,* 13 FCC
    Rcd 20254 (Wireless Tel. Bur. 1998)(\$4,000 forfeiture for four
    violations); *Brandon Communications, Inc.*, 13 FCC Rcd 20247
    (Wireless Tel. Bur. 1998)(\$2,000 forfeiture for three violations);
    *Valley Page*, 12 FCC Rcd 3087 (Wireless Tel. Bur. 1997)(\$2,000
    forfeiture for one violation); *Associated Communications Group,
    Inc*., 10 FCC Rcd 12114 (Wireless Tel. Bur. 1995)(\$2,000 forfeiture
    for one violation); *Teton Communications, Inc.*, 10 FCC Rcd 8832
    (Wireless Tel. Bur. 1995)(\$2,000 forfeiture for one violation);
    *Semo Mobile Communications, Inc*., 5 FCC Rcd 4801 (Mob. Serv. Div.
    1990)(\$3,190 forfeiture for one violation); *Aircall
    Communications, Inc*., 5 FCC Rcd 3077 (Mob. Serv. Div. 1990)(\$2,330
    forfeiture for one violation).

[^40]: *Id*.

[^41]: *Application for Review Order*, 13 FCC Rcd at 23857.

[^42]: 47 C.F.R. § 1.946(d).

[^43]: *See MobileComm of Virginia*, 13 FCC Rcd 21594 (1998).

[^44]: *Thomas J. and Nancy A. McIlraith*, 12 FCC Rcd 14999 (1997);
    *Crista Ministries, Inc*., 13 FCC Rcd 21598 (1998).

[^45]: *See*, *e.g*., *Group W Radio, Inc.*, 10 FCC Rcd 1080 (1995);
    *Tariff Filing Requirements for Nondominant Common Carriers*, 8 FCC
    Rcd 744 (1993).

[^46]: *See James A. Kay, Jr*., 13 FCC Rcd 16369, 16373-16374 (1998).

[^47]: *Id.; see also* *Attorney General v. Irish Northern Aid
    Committee*, 530 F. Supp. 241 (S.D.N.Y. 1981).

[^48]: 47 C.F.R. § 1.106.