**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+-----------------------------------+---+-------------------------------+
| In the Matter of                  | * | **EB DOCKET NO. 06-168**      |
|                                   | * |                               |
| **COMMERCIAL RADIO SERVICE,       | ) | File No. EB-06-IH-1362        |
| INC.**                            | * |                               |
|                                   | * | NAL Acct. No. 200632080166    |
| Licensee of Private Land Mobile   |   |                               |
| Stations WNDS861, Reelsville,     | * |                               |
| Indiana; WNIL729, Paxton,         | * |                               |
| Indiana; WPCJ772, West Terre      | ) |                               |
| Haute, Indiana; and WPNU312       | * |                               |
| Greencastle, Indiana/West Terre   | * |                               |
| Haute, Indiana                    |   |                               |
|                                   | * |                               |
| Licensee of Commercial Land       | * |                               |
| Mobile Station WNGE348, West      | ) |                               |
| Terre Haute, Indiana              | * |                               |
|                                   | * |                               |
| **TIMOTHY M. DOTY**               |   |                               |
|                                   | * |                               |
| Licensee of General               | * |                               |
| Radiotelephone Operator License   | ) |                               |
| PG1814366; and Amateur Radio      | * |                               |
| Operator and Licensee of Amateur  | * |                               |
| Radio Station WB9MDC, West Terre  |   |                               |
| Haute, Indiana                    | * |                               |
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+-----------------------------------+---+-------------------------------+

**ORDER TO SHOW CAUSE**

**Adopted: August 28, 2006 Released: August 30, 2006**

By the Commission:

# 

# I. introduction

1.  By this *Order to Show Cause*, and pursuant to Sections 312(a)
    and (c) of the Communications Act of 1934, as amended ("Act"),[^1]
    the Federal Communications Commission ("Commission"), hereby orders
    Commercial Radio Service, Inc. ("CRS") and Timothy M. Doty to show
    cause in a hearing proceeding before an administrative law judge why
    their respective above-captioned authorizations should not be
    revoked. The information before the Commission raises substantial
    and material questions as to their basic qualifications to be and
    remain Commission licensees because of the felony convictions of Mr.
    Doty and apparent misrepresentations and/or lack of candor by CRS
    regarding such convictions in applications filed with the
    Commission. This proceeding will also determine whether forfeitures
    should be imposed against CRS for willfully and repeatedly violating
    Commission rules relating to truthful and accurate statements to the
    Commission and for failing to timely amend pending Commission
    applications to disclose Mr. Doty's convictions.

# II. background

2.  In late 2005, the Commission received information suggesting that
    CRS may not have properly disclosed information about felony
    convictions of Timothy M. Doty in applications filed with the
    Commission. Thereafter, the Enforcement Bureau sent a letter of
    inquiry ("LOI") to CRS seeking information about CRS' operations,
    Commission licenses, previous filings, and whether any principal,
    officer, or director of CRS had ever been convicted of a felony.[^2]

3.  According to its LOI response,[^3] CRS is engaged in the sales and
    service of two-way radio communications equipment. Since January 1,
    1990, CRS has held authorizations for the above-captioned licensed
    radio systems. Over that same period, Timothy M. Doty has, at all
    relevant times, been a director and 50% shareholder of CRS. Mr. Doty
    also was a CRS officer from at least January 1, 1990 through May
    9, 2006. Mr. Doty holds a General Radiotelephone Operator License,
    as well as an Amateur Radio License, both of which are listed in the
    above caption.

4.  Publicly available records reveal that, on May 31, 1991, Mr. Doty
    was found guilty in the U.S. District Court for the Southern
    District of Indiana, Terre Haute Division, of violating 18 U.S.C.\
    § 2512(1)(b), involving the manufacture and possession of
    unauthorized satellite TV signal descrambling devices, a felony. He
    was sentenced to three years probation and a \$2,000 fine.

5.  In addition, publicly available records indicate that, on November
    15, 2001, Mr. Doty was found guilty in State of Indiana Vigo
    Superior Court, Division 5, of felony possession of a controlled
    substance. He was sentenced to 18 months in the Indiana Department
    of Corrections, which sentence was suspended except for 30 days.

6.  Subsequent to the first of Mr. Doty's felony convictions, CRS filed
    at least two license applications with the Commission in which CRS
    answered "No" to the question inquiring whether the applicant or any
    party directly or indirectly controlling the applicant had ever been
    convicted of a felony in state or federal court.[^4] As noted above,
    at the time of these filings, Mr. Doty was an officer, director, and
    50% shareholder of CRS.

7.  Subsequent to the second of Mr. Doty's felony convictions, CRS filed
    at least five license renewal-only applications.[^5] Renewal-only
    applications are streamlined applications for licensees that seek to
    renew their authorizations and do not need to update any information
    previously provided relating to, among other things, basic
    qualifying information, including felony convictions. If updates are
    required, renewal applicants must indicate as much and file
    renewal/modification applications instead.[^6] Under the
    Commission's Universal Licensing System, renewal-only applications
    do not require licensees to provide information relating to felony
    convictions. Renewal/modification applications, by contrast, do
    require licensees to provide information about felony
    convictions.[^7] By filing renewal-only applications rather than
    renewal/modification applications, CRS failed to provide information
    to the Commission about Mr. Doty's felony convictions that it was
    otherwise required to disclose.

8.  In each of the applications discussed above, CRS certified that all
    of the statements therein were true, complete, correct, and made in
    good faith.

# III. discussion

9.  Section 312(a)(2) of the Act provides that the Commission may revoke
    any license or construction permit "because of conditions coming to
    the attention of the Commission which would warrant it in refusing
    to grant a license or permit on an original application."[^8] The
    character of the applicant is among those factors that the
    Commission considers in its review of applications to determine
    whether the applicant has the requisite qualifications to be a
    Commission licensee.[^9]

10. *Felony Convictions.* In assessing character qualifications, the
    Commission considers, as relevant, "evidence of any conviction for
    misconduct constituting a felony."[^10] The Commission has found
    that "\[b\]ecause all felonies are serious crimes, any conviction
    provides an indication of an applicant's or licensee's propensity to
    obey the law" and to conform to provisions of both the Act and the
    agency's rules and policies.[^11] Thus, felony convictions raise
    potential questions regarding a licensee's qualifications.

11. Timothy M. Doty, who at all relevant times has been a director and
    50% shareholder of CRS, has twice been convicted of felonies in
    state and federal courts. Mr. Doty's felony convictions raise
    serious questions as to whether he possesses the requisite character
    qualifications to be and remain a Commission licensee. Similarly,
    because of the extent of his ownership and control of CRS, Mr.
    Doty's felony convictions also raise serious questions about the
    character qualifications of CRS to be and remain a Commission
    license.[^12] Consequently, we will designate appropriate issues for
    hearing to determine the effect, if any, of Mr. Doty's felony
    convictions on his basic character qualifications as well as those
    of CRS.[^13]

12. *False Certification/Misrepresentation/Lack of Candor*. The courts
    have recognized that "\[t\]he FCC relies heavily on the honesty and
    probity of its licensees in a regulatory system that is largely
    self-policing."[^14] Misrepresentation and lack of candor raise
    immediate concerns as to whether a licensee will be truthful in
    future dealings with the Commission.[^15] Misrepresentation is a
    false statement of fact made with intent to deceive.[^16] Lack of
    candor is concealment, evasion, or other failure to be fully
    informative, accompanied by intent to deceive.[^17] Intent can be
    shown in many ways. If a licensee knowingly makes a false statement,
    that is sufficient proof of intent to deceive.[^18] Intent to
    deceive can also be inferred when one has a clear motive to
    deceive.[^19] Moreover, intent can be found when the surrounding
    circumstances clearly show the existence of intent to deceive, even
    if there is no direct evidence of a motive.[^20] The Commission may
    revoke the license of a licensee who deliberately makes
    misrepresentations or lacks candor in dealing with the agency
    because he or she lacks the basic character qualifications to hold
    the license.[^21]

13. CRS' failure to disclose the felony conviction of one of its
    principals raises a substantial and material question of fact as to
    whether CRS made false certifications, misrepresented facts to the
    Commission, and/or demonstrated a lack of candor. The mere existence
    of an inaccuracy in any application, without any indication that
    there was intentional deception, is insufficient to justify
    consideration of a misrepresentation issue in an evidentiary
    hearing.[^22] In this case, however, CRS had a motive for not
    revealing Timothy M. Doty's felony convictions to the Commission \--
    to conceal information that would potentially disqualify both CRS
    and Mr. Doty as Commission licensees.

14. CRS should have revealed the existence of Mr. Doty's felony
    convictions in applications that it filed with the Commission.
    Instead, CRS affirmatively represented otherwise in at least two
    license applications, and failed to disclose the convictions in at
    least five renewal applications. In each application, CRS also
    certified that all of the statements therein were true, complete,
    correct, and made in good faith even though its filings appear to
    have satisfied none of these standards. Under the circumstances
    presented here, we determine that a hearing is warranted under
    Section 312 of the Act to determine whether CRS and Timothy M.
    Doty's licenses should be revoked because they lack the requisite
    character to be or remain Commission licensees.

# IV. ORDERING CLAUSES

15. **ACCORDINGLY, IT IS ORDERED** that, pursuant to Sections 312(a)
    and (c) of the Communications Act of 1934, as amended,[^23] and
    authority delegated pursuant to Sections 0.111, 0.311, and 1.91(a)
    of the Commission's rules,[^24] CRS and Timothy M. Doty are hereby
    ORDERED TO SHOW CAUSE why their respective captioned authorizations
    SHOULD NOT BE REVOKED**.** CRS, by an officer representative, and
    Mr. Doty shall appear before an administrative law judge at a time
    and place to be specified in a subsequent order and provide evidence
    upon the following issues:

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1.  to determine the effect of Mr. Doty's felony convictions on his
    qualifications to be and to remain a Commission licensee;

2.  to determine the effect of Mr. Doty's felony convictions on the
    qualifications of CRS to be and to remain a Commission licensee;

3.  to determine whether CRS made misrepresentations and/or lacked
    candor and/or violated Section 1.17 of the Commission's rules
    regarding the felony convictions of Mr. Doty in any applications
    filed with the Commission;

4.  to determine whether CRS failed to timely amend Commission
    applications to disclose Mr. Doty's felony convictions, in violation
    of Section 1.65 of the Commission's rules;

5.  to determine whether CRS made false certifications in any
    applications filed with the Commission;

6.  to determine, in light of the evidence adduced pursuant to the
    foregoing issues, whether Mr. Doty is qualified to be and to remain
    a Commission licensee;

7.  to determine, in light of the evidence adduced pursuant to the
    foregoing issues, whether CRS is qualified to be and to remain a
    Commission licensee;

8.  to determine, in light of the evidence adduced pursuant to the
    foregoing issues, whether the above-captioned licenses of Mr. Doty
    should be revoked;

9.  to determine, in light of the evidence adduced pursuant to the
    foregoing issues (1) through (7), whether the above-captioned
    licenses of CRS should be revoked.

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16. **IT IS FURTHER ORDERED** that, pursuant to Section 312(c) of the
    Communications Act of 1934, as amended, and Section 1.91(c) of the
    Commission's rules,[^25] to avail the parties of the opportunity to
    be heard and the right to present evidence in the hearing in this
    proceeding, an officer representative of CRS and Timothy M. Doty, in
    person or by their respective attorneys, SHALL FILE with the
    Commission, within 30 calendar days of the release of this Order to
    Show Cause, a written appearance in triplicate stating that they
    will appear on the date fixed for hearing and present evidence on
    the issues specified herein.

17. **IT IS FURTHER ORDERED** that, pursuant to Section 1.92(c) of the
    Commission's rules,[^26] if either CRS or Timothy M. Doty or both
    fails to timely file a written appearance as specified in paragraph
    14, above, or has not filed a petition to accept, for good cause
    shown, a written appearance beyond the expiration of the 30-day
    period, the right to a hearing as to CRS and/or Mr. Doty SHALL BE
    DEEMED TO BE WAIVED. Where a hearing is waived, the presiding
    administrative law judge shall, at the earliest practicable date,
    issue an order terminating the hearing proceeding and certifying the
    case to the Commission.

18. **IT IS FURTHER ORDERED** that, irrespective of the resolution of
    the foregoing issues, it SHALL BE DETERMINED, pursuant to Section
    503(b)(1) of the Act,[^27] whether an ORDER OF FORFEITURE in the
    amount not to exceed \$11,000 for each violation or each day of a
    continuing violation, up to a total of \$97,500 for any single act
    or failure to act should be issued against CRS for having failed to
    disclose the felony convictions of Timothy M. Doty in one or more of
    its applications, in willful and/or repeated violation of Sections
    1.17 and 1.65 of the Commission's rules.[^28] The forfeiture, if
    any, shall be adjusted based upon consideration of the factors
    enumerated in Section 503(b)(2), such as "the nature, circumstances,
    extent and gravity of the violations 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]

19. **IT IS FURTHER ORDERED** that the Chief, Enforcement Bureau, SHALL
    BE MADE a party to this proceeding without the need to file a notice
    of appearance.

20. **IT IS FURTHER ORDERED** that, pursuant to Section 312(d) of the
    Act,[^30] and Section 1.91(d) of the Commission's rules,[^31] the
    burden of proceeding with the introduction of evidence and the
    burden of proof with respect to all of the issues specified above
    SHALL BE on the Enforcement Bureau.

21. **IT IS FURTHER ORDERED** that a copy of each document filed in this
    proceeding subsequent to the date of adoption of this Order to Show
    Cause SHALL BE SERVED on Gary Schonman, Special Counsel,
    Investigations and Hearings Division, Enforcement Bureau, Federal
    Communications Commission, 445 12th Street, S.W., Room 4-C237,
    Washington, D.C. 20554.

22. **IT IS FURTHER ORDERED** that, copies of this Order to Show Cause
    SHALL BE SENT, by Certified Mail, Return Receipt Requested, to CRS
    and to Timothy M. Doty at 915 S. Prospect Street, Terre Haute,
    Indiana 47802, and to counsel for CRS: Russell D. Lukas, Esquire,
    Lukas, Nace, Gutierrez & Sachs, 1650 Tysons Boulevard, Suite 1500,
    McLean, Virginia 22102.

23. **IT IS FURTHER ORDERED** that a copy of this Order to Show Cause or
    a summary thereof SHALL BE PUBLISHED in the Federal Register.

    **FEDERAL COMMUNICATIONS COMMISSION**

Marlene H. Dortch Secretary

[^1]: 47 U.S.C. §§ 312(a) and (c).

[^2]: *See* Letter from William H. Davenport, Chief, Investigations and
    Hearings Division, Enforcement Bureau, Federal Communications
    Commission, to Commercial Radio Service, Inc., dated May 23, 2006.

[^3]: *See* Letter from Russell D. Lukas, Esquire, Lukas, Nace,
    Gutierrez & Sachs, counsel for Commercial Radio Service, Inc., to
    William H. Davenport, Chief, Investigations and Hearings Division,
    Enforcement Bureau, Federal Communications Commission, dated June
    22, 2006 ("LOI Response"). In addition to its LOI Response, CRS
    filed a request seeking confidential treatment of certain
    information provided with the response. We do not rule on CRS'
    request at this time because it is unnecessary to do so for purposes
    of this Order. Consistent with the request, however, this Order
    relies on information in the public domain and the portions of CRS'
    LOI Response for which it did not seek confidential treatment.

[^4]: *See, e.g.,* Application for Mobile Radio Service Authorization,
    FCC Form 600 (For New Station), File No. D122642, filed March 1,
    1999; FCC Application for Wireless Telecommunications Bureau Radio
    Service Authorization, FCC Form 601 (For Modifications of Station
    WNGE348), File No. 253365, filed Sept. 29, 2000.

[^5]: *See, e.g.,* FCC Application for Wireless Telecommunications
    Bureau Radio Service Authorization, FCC Form 601 (For Renewal-Only
    of Station WNIL729), File No. 1375615, filed July 8, 2003; FCC
    Application for Wireless Telecommunications Bureau Radio Service
    Authorization, FCC Form 601 (For Renewal-Only of Station WPCJ772),
    File No. 1524776, filed Nov. 24, 2003; FCC Application for Wireless
    Telecommunications Bureau Radio Service Authorization, FCC Form 601
    (For Renewal-Only of Station WPNU312), File No. 1740183, filed May
    18, 2004; FCC Application for Wireless Telecommunications Bureau
    Radio Service Authorization, FCC Form 601 (For Renewal-Only of
    Station WNGE348), File No. 2067489, filed March 4, 2005; and FCC
    Application for Wireless Telecommunications Bureau Radio Service
    Authorization, FCC Form 601 (For Renewal-Only of Station WNDS861),
    File No. 2316369, filed September 15, 2005.

[^6]: See FCC Form 601 -- Instructions, p. 17.

[^7]: *Id.*

[^8]: 47 U.S.C. § 312(a)(2).

[^9]: *See Policy Regarding Character Qualifications in Broadcast
    Licensing, Amendment of Part 1, the Rules of Practice and Procedure,
    Relating to Written Responses to Commission Inquiries and the Making
    of Misrepresentation to the Commission by Applicants, Permittees,
    and Licensees, and the Reporting of Information Regarding Character
    Qualifications*, Policy Statement and Order, 5 FCC Rcd 3252, 3252
    (1990) ("*1990 Modifications of Character Policy Statement"), recon.
    on other grounds,* 6 FCC Rcd 3448 (1991), *modified on other
    grounds,* 7 FCC Rcd 6564 (1992)*.* The Commission has consistently
    applied these broadcast character standards to applicants and
    licensees in the other radio services. *See, e.g., Schoenbohm v.
    FCC*, 204 F.3d 243, 246-49 (D.C. Cir. 2000), *cert. denied*, 531
    U.S. 968 (2000) (affirming the Commission's denial of an amateur
    radio operator's license renewal application based on the licensee's
    felony conviction for computer fraud, as well as its lack of candor
    regarding such conviction); *Ronald Brasher et al.,* 19 FCC Rcd
    18462 (2004) (affirming Administrative Law Judge's Initial Decision
    revoking, denying, or dismissing licensees' private land mobile
    radio licenses and applications based on the licensees'
    misrepresentations and lack of candor, unauthorized transfers of
    control, and abuse of process).

[^10]: *1990 Modifications of Character Policy Statement*, 5 FCC Rcd at
    3252 ¶ 4. *See, e.g., Contemporary Media, Inc. v. FCC,* 214 F.3d
    187, 193 (D.C. Cir. 2000) (Commission properly considered any felony
    conviction of broadcast licensee's principal as a relevant factor in
    evaluating propensity of licensee to obey the law).

[^11]: *1990 Modifications of Character Policy Statement*, 5 FCC Rcd at
    3252 ¶ 5. *See also* 47 U.S.C. § 312(a)(1) (authorizing license
    revocation "for false statements knowingly made either in the
    application or in any statement of fact which may be required
    pursuant to section 308").

[^12]: *See Williamsburg County Broadcasting Corporation*, Order To Show
    Cause and Order Requiring Consolidation, 5 FCC Rcd 3034(1990). *See
    also* *Commission Clarifies Policies Regarding Licensee*
    Participation *in Drug Trafficking*, Public Notice, 4 FCC Rcd 7533
    (1989) (Commission regards drug trafficking as a matter of the
    gravest concern).

[^13]: The facts of Mr. Doty's felony convictions are *res judicata* and
    will not be retried in this hearing.

[^14]: *Contemporary Media,* 214 F.3d at 193. *See also* 47 C.F.R. §
    1.17 (requiring truthful and accurate statements in all statements
    to the Commission); 47 C.F.R. § 1.65 (setting forth deadlines for
    revising or amending pending FCC applications if such applications
    are no longer substantially accurate or complete or there has been a
    substantial change as to any other matter of decisional
    significance); *Policy Regarding Character Qualifications in
    Broadcast Licensing Amendment of Rules of Broadcast Practice and
    Procedure, Relating to Written Responses to Commission Inquiries and
    the Making of Misrepresentation to the Commission by Applicants,
    Permittees, and Licensees, and the Reporting of Information
    Regarding Character Qualifications*, Report, Order and Policy
    Statement, 102 FCC 2d 1179, 1210-11, ¶ 60 (1986) ("*Character Policy
    Statement"), recon. denied,* 1 FCC Rcd 421 (1986), *appeal dismissed
    sub nom. National Ass'n for Better Broadcasting v. FCC*, No. 86-1179
    (D.C. Cir. June 11, 1987).

[^15]: *Character Policy Statement,* 102 FCC 2d at 1210-11 ¶ 60. A false
    certification may also constitute a misrepresentation. *See, e.g.,
    San Francisco Unified School District,* Hearing Designation Order
    and Notice of Apparent Liability for Forfeiture, 19 FCC Rcd 13326,
    13334, ¶ 19 n. 40-41 (2004), Initial Decision, FCC 06D-01 (ALJ April
    7, 2006).

[^16]: *See Fox River Broadcasting, Inc.,* Order, 93 FCC 2d 127, 129
    (1983).

[^17]: *Id.*

[^18]: "\[T\]he fact of misrepresentation coupled with proof that the
    party making it had knowledge of its falsity \[is\] enough to
    justify a conclusion that there was fraudulent intent." *Leflore
    Broadcasting Co., Inc. v. FCC,* 636 F.2d 454. 462 (D.C. Cir. 1980).

[^19]: *See, e.g., RKO General, Inc.,* Decision, 4 FCC Rcd 4679, 4684, ¶
    29 (Rev. Bd. 1989).

[^20]: *American International Development, Inc.,* Memorandum Opinion
    and Order, 86 FCC 2d 808, 816 n. 39 (1981), *aff'd sub nom. KXIV,
    Inc. v. FCC,* 704 F.2d 1294 (D.C. Cir. 1983) (Commission stated that
    "the absence of direct evidence of motive is not significant where
    the record otherwise clearly establishes that deceptive conduct has
    occurred.").

[^21]: *Contemporary Media*, 214 F.3d at 196 ("It is well recognized
    that the Commission may disqualify an applicant who deliberately
    makes misrepresentations or lacks candor in dealing with the agency)
    (citing *Schoenbohm*, 204 F.3d at 247. *See also FCC v. WOKO, Inc.,*
    329 U.S. 223, 225-27 (1946); *Swan Creek Communications, Inc. v.
    FCC,* 39 F.3d 1217, 1221-24 (D.C. Cir. 1994); *Garden State
    Broadcasting Ltd. v. FCC,* 996 F.2d 386, 393-94 (D.C. Cir. 1993).

[^22]: *See, e.g., Greater Muskegon Broadcasters, Inc.*, Memorandum
    Opinion and Order, 11 FCC Rcd 15464, 15472-73, ¶¶ 22-23 (1996).

[^23]: 47 U.S.C. §§ 312(a) and (c).

[^24]: 47 C.F.R. §§ 0.111, 0.311 and 1.91(a).

[^25]: 47 C.F.R. § 1.91(c).

[^26]: 47 C.F.R. § 1.92(c).

[^27]: 47 U.S.C. § 503(b)(1).

[^28]: 47 C.F.R. §§ 1.17, 1.65.

[^29]: *See Commission's Forfeiture Policy Statement and Amendment of
    Section 1.80 of the Rules to Incorporate the Forfeiture Guidelines,*
    Report and Order, 12 FCC Rcd 17087, 17100-01, ¶ 27, 17112 Appendix A
    (1997), *recon. denied,* 15 FCC Rcd 303 (1999). *See also* 47 C.F.R.
    § 1.80(b).

[^30]: 47 U.S.C. § 312(d).

[^31]: 47 C.F.R. § 1.91(d).