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 FEDERAL  COMMUNICATIONS  COMMISSION  FCC  01-  341 
 1 
 Before  the  FEDERAL  COMMUNICATIONS  COMMISSION 
 Washington,  D.  C.  20554 
 In  the  Matter  of  ) 
 ) 
 JAMES  A.  KAY,  JR.  )  WT  Docket  No.  94-  147 
 ) 
 Licensee  of  One  Hundred  Fifty  Two  ) 
 Part  90  Licenses  in  the  ) 
 Los  Angeles,  California  Area  ) 

 APPEARANCES 
 Robert  J.  Keller  and  Aaron  P.  Shainis  on  behalf  of  James  A.  Kay,  Jr.;  and  Charles  W. 
 Kelley,  Gary  P.  Schonman,  William  H.  Knowles-  Kellett  and  John  J.  Schauble,  on  behalf 
 of  the  Wireless  Telecommunications  Bureau  and  the  Enforcement  Bureau,  1  Federal 
 Communications  Commission. 

 DECISION 
 Adopted:  November  20,  2001  Released:  January  25,  2002 
 By  the  Commission:  Commissioner  Martin  concurring  in  part,  dissenting  in  part,  and 
 issuing  a  statement. 

 I.  INTRODUCTION 
 1.  This  decision  modifies  an  Initial  Decision  by  Chief  Administrative  Law  Judge 
 Joseph  Chachkin  concluding  that  James  A.  Kay,  Jr.  is  qualified  to  remain  the  licensee  of 
 152  Part  90  land  mobile  stations.  James  A.  Kay,  Jr.,  FCC  99D-  04  (ALJ  Sept.  10,  1999). 
 We  find  that  Kay  failed  to  respond  to  Commission  inquiries  and  filed  a  pleading  that 
 lacked  candor.  We  will  therefore  revoke  Kays  stations  in  the  800  MHz  band  and  assess 
 a  forfeiture  of  $10,000  against  Kay. 

 II.  BACKGROUND 

 1  The  Enforcement  Bureau  was  established  effective  November  8,  1999.  See  News  Release  FCC 
 Reshapes  for  the  Future  (Oct.  26,  1999).  Its  responsibilities  include  serving  as  trial  staff  in  formal 
 Commission  hearings.  It  has  participated  in  this  proceeding  in  lieu  of  the  Wireless  Telecommunications 
 Bureau  beginning  in  November  1999. 
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 2.  On  December  13,  1994,  the  Commission  designated  this  proceeding  for 
 hearing  to  determine  whether  Kay,  a  licensee  of  land  mobile  radio  facilities  under  Part  90 
 of  the  Commission's  rules,  has  complied  with  those  rules  and  whether  he  possesses  the 
 character  qualifications  to  remain  a  Commission  licensee.  James  A.  Kay,  Jr.,  10  FCC 
 Rcd  2062  (1994),  modified,  11  FCC  Rcd  5324  (1996).  Kay  was  ordered  to  show  cause 
 why  his  licenses  should  not  be  revoked  or  cancelled,  why  he  should  not  be  ordered  to 
 cease  and  desist  from  certain  violations  of  the  Communications  Act,  and  why  an  order  for 
 forfeiture  should  not  issue. 

 3.  The  Commission  had  received  numerous  complaints  about  Kay's  operations, 
 including  allegations  that  he  was  falsely  reporting  the  number  of  mobile  units  he  serves  in 
 order  to  avoid  the  channel  sharing  and  recovery  provisions  of  the  rules.  James  A.  Kay, 
 Jr.,  10  FCC  Rcd  at  2062    2.  On  January  31,  1994,  the  Bureau,  pursuant  to  47  U.  S.  C.   
 308(  b),  served  Kay  with  a  letter  of  inquiry  requesting  him  to  provide  certain  information, 
 including  information  about  the  loading  of  his  stations.  Id.  at  2063-  64    6-  7.  After  an 
 exchange  of  correspondence  and  extensions  of  time,  the  Bureau,  on  June  10,  1994, 
 repeated  its  request.  Kay  responded  on  June  24,  1994  that:  "[  T]  here  is  no  date  .  .  .  for 
 which  the  submission  of  the  requested  information  would  be  convenient."  Id.  at  2064   
 8.  The  Commission  thereupon  designated  this  case  for  hearing.  Id.  Of  the  eight  issues 
 originally  designated,  four  remain  before  us: 

 a)  To  determine  whether  James  A.  Kay,  Jr.  has  violated  Section  308(  b)  of  the  Act 
 and/  or  Section  1.17  of  the  Commission's  Rules  by  failing  to  provide  information 
 requested  in  his  responses  to  Commission  inquiries; 

 .  .  .  . 
 c)  To  determine  if  Kay  has  willfully  or  repeatedly  violated  any  of  the 
 Commission's  construction  and  operation  requirements  in  violation  of  Sections 
 90.155,  90.157,  90.  313,  90.623,  90.  627,  90.631,  and  90.633  of  the  Commission's 
 Rules; 

 d)  To  determine  whether  [Kay]  has  abused  the  Commission's  processes  by  filing 
 applications  in  multiple  names  in  order  to  avoid  compliance  with  the 
 Commission's  channel  sharing  and  recovery  provisions  in  violation  of  Sections 
 90.623  and  90.629; 

 .  .  .  . 
 g)  To  determine,  in  light  of  the  evidence  adduced  pursuant  to  the  foregoing  issues, 
 whether  [Kay]  is  qualified  to  remain  a  Commission  licensee  .  .  .  . 

 4.  This  matter  was  originally  assigned  to  Administrative  Law  Judge  Richard  L. 
 Sippel,  who,  following  further  proceedings,  issued  a  summary  decision  in  which  he 
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 revoked  Kay's  licenses  and  ordered  Kay  to  forfeit  $75,000.  James  A.  Kay,  Jr.,  11  FCC 
 Rcd  6585  (ALJ  1996).  That  decision  was  subsequently  vacated  and  the  proceeding  was 
 remanded  for  a  full  hearing.  James  A.  Kay,  Jr.,  12  FCC  Rcd  2898  (OGC  1997).  After 
 the  remand,  Judge  Sippel  added  a  further  issue  against  Kay  based  on  findings  made  in 
 another  proceeding  (WT  Docket  No.  97-  56),  that  an  individual  named  Marc  D.  Sobel  had 
 transferred  control  of  several  Part  90  stations  to  Kay  without  Commission  authorization 
 and  that  he  made  misrepresentations  and  lacked  candor.  James  A.  Kay,  Jr.,  FCC  98M-  15 
 (Feb.  2,  1998).  See  Paragraph  71,  infra.  On  October  19,  1998,  the  Commission  ordered 
 the  appointment  of  a  new  administrative  law  judge  to  preside  over  this  case.  James  A. 
 Kay,  Jr.,  FCC  98-  274  (Oct.  19,  1998).  Then-  Chief  Administrative  Law  Judge  Joseph 
 Chachkin  (ALJ)  2  appointed  himself  to  preside.  James  A.  Kay,  Jr.,  FCC  98M-  122  (Oct. 
 30,  1998). 

 5.  In  his  Initial  Decision  (ID),  the  ALJ  concluded  that  the  Bureau  failed  to 
 demonstrate  any  misconduct  by  Kay  that  would  warrant  revocation  of  his  licenses.  ID  at 
   223.  On  the  contrary,  the  ALJ  strongly  faulted  the  Bureaus  own  conduct,  finding: 

 This  Judge  has  never  seen  prosecutorial  misconduct  of  this  magnitude  in  the 
 twenty  years  he  has  presided  over  Commission  cases.  Such  misconduct  can  not 
 be  countenanced.  It  is  completely  contrary  to  the  Commissions  duty  and 
 responsibility  to  treat  all  of  its  licensees  in  a  fair  and  evenhanded  manner. 

 ID  at  n.  49.  3 
 6.  The  ALJ  found  no  basis  to  fault  Kay  under  the    308(  b)  issue.  ID  at    175- 
 81.  He  found  that  the  Bureau  did  not  allege  that  Kays  responses  to  the  Bureaus  inquiry 
 contained  misrepresentations  or  lacked  candor.  He  further  found  that  (1)  the  Bureaus 
 inquiry  was  excessively  broad  and  constituted  an  impermissible  fishing  expedition,(  2) 
 that  Kay  ultimately  produced  the  information  requested  after  designation  for  hearing,  and 
 (3)  that  Kay  had  legitimate  concerns  as  to  whether  the  Bureau  would  keep  the  sensitive 
 business  information  requested  confidential. 

 7.  The  ALJ  rejected  the  Bureaus  contention  that  Kay  had  underutilized  the 
 frequencies  on  which  he  was  licensed.  ID  at    186-  98.  He  found  that  the  Bureau  had  not 
 shown  that  Kay  was  subject  to  any  specific  loading  requirement.  He  also  found 
 significant  flaws  in  the  manner  that  the  Bureau  analyzed  the  evidence  in  attempting  to 
 support  its  claims. 

 2  Chief  Judge  Chachkin  retired  from  the  Commission  on  October  31,  1999. 
 3  In  James  A.  Kay,  Jr.,  13  FCC  Rcd  16369  (1998),  pet.  for  recon.  dismissed,  14  FCC  Rcd  14  FCC  Rcd  1291 

 (1998),  we  considered  Kays  allegations  of  prosecutorial  misconduct  against  the  Bureau.  Without 
 endorsing  all  aspects  of  the  Bureaus  conduct,  we  found  that  Kay  had  not  shown  that  the  Bureaus  conduct 
 was  outrageous  or  shocking  or  that  Kay  had  suffered  material  prejudice.  Having  reviewed  the  record  of 
 this  proceeding,  we  adhere  to  this  conclusion.  We  therefore  disavow  the  ALJs  conclusions  regarding  the 
 Bureau.  Similarly,  we  find  no  reason  to  adopt  the  dissents  suggestion  that  we  remand  for  new  hearings  as 
 to  this  matter. 
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 8.  Additionally,  the  ALJ  rejected  allegations  that  Kay  abused  the  Commissions 
 processes  by  filing  applications  in  multiple  names.  ID  at    199-  207.  Although  the  ALJ 
 found  that  Kay  was  involved  in  filing  applications  on  behalf  of  four  individuals,  the  ALJ 
 found  that  Kay  had  a  factual  basis  for  believing  that  these  individuals  had  a  bona  fide 
 intention  to  use  the  radio  facilities  applied  for.  Moreover,  the  ALJ  questioned  the 
 credibility  of  the  witnesses  against  Kay.  According  to  the  ALJ,  Kay  had  no  motive  to 
 acquire  facilities  in  the  manner  alleged,  since  he  could  have  legitimately  applied  for  them 
 in  his  own  name. 

 9.  Finally,  although  the  ALJ  accepted  the  conclusion  in  WT  Docket  No.  97-  56, 
 that  Sobel  transferred  control  of  the  facilities  in  question  to  Kay  without  authorization,  he 
 found  no  basis  for  disqualifying  Kay.  ID  at    209-  18.  In  this  regard,  he  found  that  Kay 
 did  not  make  any  misrepresentation  or  engage  in  other  deception  in  connection  with  the 
 alleged  transfer. 

 10.  Now  before  the  Commission  are:  (1)  the  Wireless  Telecommunications 
 Bureaus  Exceptions  and  Brief,  filed  October  12,  1999;  (2)  the  Reply  of  James  A.  Kay, 
 Jr.,  to  the  Wireless  Telecommunications  Bureaus  Exceptions  and  Brief;  and  (3)  related 
 procedural  matters.  For  the  reasons  set  forth  below,  we  will  modify  the  initial  decision. 
 We  find  that  Kays  responses  to  the  Bureaus  308(  b)  request  failed  to  provide 
 information  that  he  was  obligated  as  a  licensee  to  produce.  We  also  find  that  Kay  filed  a 
 pleading  concerning  Sobel  that  lacked  candor.  We  will  therefore  revoke  Kays  stations  in 
 the  800  MHz  band  and  assess  a  forfeiture  of  $10,000  against  Kay. 

 III.  PROCEDURAL  MATTERS 
 11.  Before  turning  to  the  merits  of  this  case,  we  wish  to  address  two  procedural 
 matters.  First,  Kay  contends  that  the  clear  and  convincing  evidence  standard  of  proof 
 applies  in  this  case,  rather  than  the  more  lenient  preponderance  of  evidence  test.  We 
 disagree.  Since  the  Supreme  Courts  ruling  in  Steadman  v.  SEC,  450  U.  S.  91  (1981),  it  is 
 well  established  that  the  preponderance  of  the  evidence  test  applies  in  administrative 
 proceedings.  See  Silver  Star  Communications-  Albany,  Inc.,  6  FCC  Rcd  6905,  6907  n.  3 
 (1991);  Fox  River  Broadcasting,  Inc.  ,  88  FCC  2d  1132,  1136  n.  9  (Rev.  Bd.  1982). 
 Citizens  for  Jazz  on  WRVR,  Inc.  v.  FCC,  775  F.  2d  392,  395  n.  1  (D.  C.  Cir.  1985),  cited 
 by  Kay,  does  not  hold  to  the  contrary. 

 12.  Second,  Kay  argues  that  the  Bureaus  exceptions  and  brief  should  be  stricken 
 as  violating  the  provisions  of  47  C.  F.  R.    1.276  and  1.277.  According  to  Kay,  the 
 Bureaus  pleading  lacks  a  separate  statement  of  the  questions  of  law  presented  as 
 required  by  47  C.  F.  R.    1.276(  a)(  2).  Moreover,  Kay  submits  that  the  pleading  exceeds 
 the  limit  of  30  pages  4  because,  in  addition  to  29  pages  of  text,  the  pleading  has  seven 

 4  The  provisions  of  47  C.  F.  R.    1.277  limits  exceptions  and  briefs  to  25  pages.  The  General  Counsel 
 granted  the  parties  a  five  page  extension  in  this  case.  James  A.  Kay,  Jr.,  FCC  99I-  19  (Oct.  7,  1999). 
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 pages  of  attachments.  47  C.  F.  R.    1.277(  c).  The  Bureaus  pleading  does  not  exceed  the 
 page  limitation.  Attachments  consisting  of  materials  that  factually  support  exceptions  are 
 not  counted  in  determining  the  page  limit.  See  Belo  Broadcasting  Corp.,  61  FCC  2d  10, 
 11    4  (1976);  Gross  Broadcasting  Co.,  65  FCC  2d  514,  514    3  (Rev.  Bd.  1977);  47 
 C.  F.  R.    1.  48(  a).  While,  the  Bureaus  pleading  does  not  have  a  separate  statement  of  the 
 questions  of  law  presented,  as  required  by  the  rule,  a  statement  does  precede  the 
 discussion  of  each  individual  issue.  The  Bureau  indicates  that  a  reformatted  pleading 
 could  be  refiled  without  exceeding  the  page  limitation.  We  see  no  reason  to  disrupt  the 
 proceeding  at  this  point  merely  to  require  such  a  reformatting. 

 IV.    308  ISSUE 
 13.  The  ALJ  found  that  Kay  operated  Part  90  land  mobile  radio  facilities  in  the 
 Los  Angeles,  California,  area  and  that  he  began  providing  two-  way  mobile  service  to 
 others  on  a  commercial  basis  in  approximately  1982-  84.  He  operated  a  sole 
 proprietorship  under  the  name  of  Lucky's  Two-  Way  Radio.  Lucky's  sold  repeater 
 service,  rented  repeater  site  space,  and  provided  technical  consulting  services.  ID  at    8- 
 9.  He  offered  these  services  through  Specialized  Mobile  Radio  (SMR)  stations  that 
 operated  in  the  800  MHz  band,  5  and  through  private  carrier  stations  that  operated  in  the 
 470-  512  MHz  or  UHF  band.  Kay's  UHF  stations  were  licensed  in  the  Business  Radio 
 Service.  6  ID  at    84. 

 14.  On  January  31,  1994,  the  Bureau  requested,  pursuant  to  47  U.  S.  C.    308(  b), 
 that  Kay  furnish  the  Bureau  various  information  concerning  his  licensed  facilities.  ID  at 
   10.  The  Bureau  stated  that: 

 The  Commission  has  received  complaints  questioning  the  construction  and 
 operational  status  of  a  number  of  your  licensed  facilities.  Specifically,  the 
 complaints  allege  that  numerous  facilities  licensed  to  you  are  on  U.  S.  Forest 
 Service  Land,  but  do  not  have  the  requisite  permits  for  such  use.  The 
 presumption  is  that  those  facilities  were  not  constructed  and  made  operational  as 
 required  by  the  Commissions  rules  and  therefore,  the  licenses  have  canceled.  In 
 addition,  the  Commission  has  also  received  complaints  questioning  the  actual 
 loading  and  use  of  your  facilities.  The  complaints  allege  that  the  licensed  loading 
 of  your  facilities  does  not  realistically  represent  the  actual  loading  of  the  facilities, 
 thereby  resulting  in  the  warehousing  of  spectrum.  [Emphasis  in  the  original.] 

 5  SMR  stations  are  classified  as  either  conventional  or  trunked.  When  trunking  is  used,  channel  access  is 
 controlled  by  a  computer,  which  gives  the  user  access  to  the  first  available  channel  or  places  the  user  in  a 
 waiting  line  to  be  served.  See  Amendment  of  Part  90,  10  FCC  Rcd  7970,  7974-  75    3-  4  (1994);  Amendment 
 of  Part  90,  60  RR  2d  867,  868    2  (1986).  6 
 Kay  was  also  the  President  and  sole  shareholder  of  Buddy  Corp.,  which  operated  under  the  business  name 
 of  Southland  Communications.  Southland  was  engaged  primarily  in  the  sales,  service,  installation,  and 
 maintenance  of  mobile  radios  and  two-  way  mobile  radio  systems.  Some,  but  not  all,  customers  of  Luckys 
 were  customers  of  Southland,  and  vice  versa.  ID  at    8-  9. 
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 Id.;  WTB  Exh.  1  (the  308(  b)  Letter). 
 15.  The  308(  b)  Letter  directed  Kay  to  produce:  (1)  an  alphabetical  list  of  the  call 
 signs  and  licensee  names  for  all  facilities  owned  or  operated  by  Kay  or  any  companies 
 under  which  he  does  business,  annotated  to  show  which  facilities  are  located  on  U.  S. 
 Forest  Service  land,  (2)  the  original  license  grant  date  for  each  call  sign,  the  date  the 
 facility  was  constructed  and  placed  into  operation,  and  the  type  of  station,  (3)  copies  of 
 all  U.  S.  Forest  Service  permits,  (4)  an  explanation  for  the  lack  of  a  U.  S.  Forest  Service 
 permit  for  any  station  located  on  U.  S.  Forest  Service  land,  (5)  a  list  of  all  of  Kay's 
 customers,  including  "the  user  name,  business  address  and  phone  number,  and  a  contact 
 person"  along  with  the  number  of  mobile  units  and,  for  trunked  systems,  the  number  of 
 control  stations  operated  by  the  user,  and  (6)  a  list  of  the  total  number  of  mobile  units 
 operated  on  each  of  Kay's  stations,  substantiated  by  business  records.  ID  at  11;  WTB 
 Exh.  1. 

 16.  Kays  then  attorney,  Dennis  C.  Brown,  a  partner  at  Brown  &  Schwaninger, 
 responded  on  February  16,  1994.  Brown  sought  "written  assurance  that  any  information 
 which  Kay  submits  in  response  to  the  Commissions  request  will  be  held  in  strictest 
 confidence  and  will  not  be  disclosed  under  any  circumstances  to  any  person  who  is  not  a 
 Commission  employee."  WTB  Exh.  348  at  1.  Brown  further  requested  that  Kay  be 
 afforded  immunity  from  any  forfeiture  action  or  criminal  prosecution  based  on  any 
 information  supplied,  and  asked  that  the  running  of  the  sixty  day  response  period  be 
 tolled  pending  action  on  the  requests  set  forth  in  the  letter.  ID  at    15;  WTB  Exh.  348. 

 17.  The  Bureau  responded  with  a  letter,  dated  March  1,  1994,  addressed  to 
 Brown.  The  Bureau  stated  that,  pursuant  to  47  C.  F.  R.    0.  459,  if  Kay  wished  to  have 
 submitted  material  withheld  from  public  inspection,  he  would  be  required  to  submit  such 
 a  request  concurrently  with  the  submission  of  the  materials.  The  Bureau  further  stated 
 that  Brown's  February  16,  1994,  letter  did  not  comply  with  47  C.  F.  R.    0.  459  and 
 therefore  "is  not  considered  a  request  that  information  submitted  .  .  .  be  withheld  from 
 public  scrutiny."  The  request  for  immunity  was  denied  on  the  grounds  that  "Congress  has 
 not  provided  for  immunity  when  responding  to  [Section  308(  b)]  requests."  The  deadline 
 for  responding  to  the  308(  b)  Letter  was  extended  to  April  14,  1994.  ID  at    16;  WTB 
 Exh.  349. 

 18.  On  April  7,  1994,  Brown  wrote  two  letters  to  the  Bureau.  In  the  first  letter, 
 Brown  specifically  requested  confidential  treatment  pursuant  to  47  C.  F.  R.    0.  459. 
 Brown  sought  confidential  treatment  to  prevent  an  unwarranted  invasion  of  privacy  in 
 that  Kay  was  submitting  (via  Brown's  second  April  7  letter)  personal  information,  such  as 
 the  extent  of  his  resources  and  how  his  business  was  affected  by  a  recent  earthquake. 
 Brown  also  requested  confidentiality  on  competitive  grounds.  The  letter  specifically 
 advised  the  Bureau  that  some  of  Kays  competitors  obtained  copies  of  the  308(  b)  Letter 
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 and  used  it  to  disparage  Kays  reputation  in  the  radio  communications  service  market. 
 Brown  expressed  concern  that  Kay's  competitors  would  obtain  the  information  which  he 
 is  submitting  and  distribute  it  in  an  effort  to  disparage  Kay  among  his  customers,  and 
 would  use  the  information  to  probe  for  weaknesses  in  his  business  strategy,  and  to  solicit 
 his  current  customers  directly.  ID  at    17;  WTB  Exh.  2. 

 19.  In  the  second  letter  dated  April  7,  1994,  Brown  addressed  the  substance  of  the 
 308(  b)  Letter.  He  presented  a  number  of  legal  objections  and  challenges  to  the  scope  of 
 the  request  and  provided  none  of  the  requested  information.  In  response  to  item  (1),  he 
 asserted  that  the  Commission  already  knew  the  call  signs  of  Kays  stations  and  declined 
 to  duplicate  that  information  or  perform  secretarial  sorting  tasks  that  the  Commission 
 could  more  expeditiously  perform  itself.  WTB  Exh.  3  at  1.  He  denied  that  the 
 Commission  had  jurisdiction  to  inquire  into  the  status  of  Kay's  U.  S.  Forest  Service 
 Permits,  and  suggested  that  the  Commission  could  plot  each  station  on  a  map  if  it 
 desired  to  ascertain  which  facilities  were  located  on  U.  S.  Forest  Service  Land.  Id.  As  to 
 item  (2),  he  asserted  that  the  Commission  records  already  showed  the  dates  the  licenses 
 were  granted,  and  that  Kay  was  not  required  to  keep  any  records  of  when  they  were 
 constructed.  Addressing  items  (3)  and  (4),  he  declined  to  provide  information  about 
 Forest  Service  permits,  claiming  that  such  information  was  irrelevant  to  the 
 Commissions  jurisdiction  and  that  a  presumption  that  facilities  lacking  a  permit  were  not 
 constructed  was  unreasonable.  ID  at    18;  WTB  Exh.  3. 

 20.  As  to  item  (5),  Brown  characterized  the  Bureaus  request  for  customer  lists 
 and  usage  data  as  an  unlawful  fishing  expedition,  since  it  was  not  directly  related  to 
 specific  complaints.  WTB  Exh.  3  at  5.  He  denied  that  Kay  was  required  to  maintain  any 
 record  of  user  names  or  of  the  other  information  about  users  that  was  requested.  He 
 complained  that  the  Bureaus  March  1,  1994  letter  (paragraph  17,  supra)  did  not  provide 
 the  requested  confidentiality.  Brown  also  asserted  that  item  (6)  essentially  required  Kay 
 to  tell  the  Commission  everything  about  everything  and  complained  that  the  March  1 
 letter  declined  to  provide  Kay  with  immunity.  WTB  Exh.  3  at  4.  He  further  protested 
 that  the  request  did  not  specify  the  time  frame  for  which  the  data  was  to  be  supplied  and 
 that,  in  any  event,  the  usage  of  Kays  facilities  fluctuated  over  time.  For  that  reason,  and 
 because  many  of  Kays  customers  had  access  to  multiple  facilities,  Brown  maintained 
 that  Kay  might  not  know  the  number  of  mobile  units  in  operation  on  each  station. 
 Additionally,  Brown  asserted  that  Kay  was  not  required  by  the  Commissions  rules  to 
 supply  loading  information  except  in  connection  with  certain  applications  and  that  Kay 
 had  provided  such  information  when  appropriate.  Brown  also  deemed  the  request 
 unduly  burdensome  in  light  of  local  conditions,  since  Kay  was  still  recovering  from  the 
 Northridge  Earthquake,  which  occurred  on  January  17,  1994  and  severely  damaged 
 Kays  home  and  business,  and  since  he  was  adversely  affected  by  the  difficult  economic 
 conditions  in  the  Los  Angeles  market.  ID  at    19-  20;  WTB  Exh.  3. 

 21.  Thereafter,  on  May  11,  1994,  the  Bureau  responded  with  a  letter  addressed 
 directly  to  Kay.  The  Bureau  told  Kay  that  it  required  answers  to  the  Bureaus  January  31 
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 letter  in  order  to  act  on  several  pending  applications  and  that  these  applications  would  be 
 dismissed  unless  Kay  responded  within  14  days.  The  letter  also  noted  that  the  April  7 
 responses  contained  copyright  notices  at  the  bottom.  7  The  Bureau  told  Kay  that  if  he 
 claimed  copyright  protection  he  would  be  required  to  file  50  copies  of  his  response  and 
 justify  why  the  copyright  laws  apply.  ID  at    24;  WTB  Exh.  4. 

 22.  Brown  replied  on  May  17,  1994.  He  specifically  challenged  the  Bureaus 
 request  for  50  copies,  which  is  more  than  required  by  section  1.51  of  the  Commissions 
 rules.  See  47  C.  F.  R.    1.  51.  He  stated:  Since  the  Commission  could  not  possibly 
 require  50  copies  for  its  own  internal  use,  the  only  reasonable  conclusion  is  that  the 
 Commission  intends  to  make  further  circulation  of  Mr.  Kay's  response  beyond  the 
 Commission.  With  respect  to  the  copyright  notice  on  Kays  response,  Brown  stated  that 
 the  notice  was  intended  to  prevent  distribution  of  the  response  outside  of  the 
 Commission,  but  otherwise  declined  to  advise  the  Commission  as  to  its  obligations 
 under  the  law  of  copyright.  ID  at    26,  WTB  Exh.  5  at  2.  Brown  also  reiterated  some  of 
 the  same  legal  objections  to  the  308(  b)  Letter  that  he  had  set  forth  in  the  second  April  7, 
 1994,  letter.  Brown  complained  that  the  Commission  had  declined  to  furnish  him  with 
 information  about  specific  complaints  under  the  Freedom  of  Information  Act  and 
 suggested  that  progress  could  be  made  on  the  matter  if  the  Bureau  would  request  specific 
 information  concerning  each  of  the  specified  facilities.  He  further  complained  that  the 
 Bureau  had  no  justification  for  threatening  to  dismiss  Kays  applications  to  get 
 information.  ID  at    27;  WTB  Exh.  5. 

 23.  The  Bureau  thereupon,  on  May  20,  1994,  responded  to  Brown's  April  7, 
 1994,  letters.  The  Bureau  characterized  Brown's  April  7  letter  as  "inadequate,  evasive, 
 and  contrived  to  avoid  full  and  candid  disclosure  to  the  Commission."  WTB  Exh.  6  at  1. 
 The  Bureau  called  it  "a  studied  effort  to  avoid  producing  any  information."  Id.;  ID  at   
 28.  The  Bureau  stated  that: 

 With  respect  to  Kay's  request  that  information  provided  to  the  Commission  in 
 response  to  our  inquiry  be  withheld  from  public  inspection,  we  will  not  make 
 those  materials  which  are  specifically  listed  under  the  provisions  of  [the 
 Commission  regulations  implementing  the  Freedom  of  Information  Act]  routinely 
 available  for  inspection  to  the  public.  Therefore,  materials  which  include  any 
 information  containing  trade  secrets  or  commercial,  financial,  or  technical  data 
 which  would  customarily  be  guarded  from  competitors,  will  not  be  made 
 routinely  available  to  the  public. 

 WTB  Exh.  6  at  1.  The  Bureau  specifically  responded  to  an  allegation,  made  in  Browns 
 first  April  7  letter,  that  the  Commission  had  improperly  disclosed  confidential 
 information  about  an  individual  named  Joe  Hiram.  The  Bureau  observed  that  Hiram  had 

 7  The  notice,  included  at  the  bottom  of  each  page  of  several  of  Browns  letters,  stated:  Entire  contents 
 copyright,  James  A.  Kay,  Jr.,  1994.  All  rights  reserved.  No  portion  of  this  document  may  be  copied  or 
 reproduced  by  any  means. 
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 consented  to  the  release  of  the  information  and  that  Brown  &  Schwaninger  had  been  so 
 informed.  The  Bureau  clarified  its  January  31  request  to  indicate  that  Kay  should  provide 
 loading  information  as  of  January  31,  1994  and  extended  the  response  date  to  June  3, 
 1994.  WTB  Exh.  6. 

 24.  On  May  25,  1994,  Brown  made  a  further  response  asking  the  Bureau  to 
 clarify  its  request  by  specifying  the  facilities  involved  in  specific  complaints.  He 
 suggested  that  Commission  employees  could  inspect  relevant  records  at  Kays  office.  He 
 also  suggested  that:  [  t]  he  Commission  might  want  to  scrutinize  the  complaints  to  assess 
 the  likely  validity  of  each  item  in  light  of  its  knowledge  of  the  credibility  of  the 
 complaining  parties  and  in  light  of  its  knowledge  of  the  benefits  of  which  they  may  hope 
 to  gain  by  harassing  Mr.  Kay.  WTB  Exh.  7  at  2.  He  proposed  that  While  Mr.  Kay 
 might  not  be  convinced  that  the  complainants  had  presented  a  prima  facie  case  .  .  .  Mr. 
 Kay  would  not  need  to  raise  such  procedural  objections  were  the  Commission  to  clarify 
 its  request  as  suggested.  WTB  Exh.  7  at  2.  Brown  asked  the  Commission  to  defer  the 
 response  date  until  14  days  after  the  conclusion  of  Kays  FOIA  litigation  seeking  to 
 obtain  copies  of  the  complaints  against  him.  ID  at    38-  39;  WTB  Exh.  7. 

 25.  On  the  next  day,  May  26,  1994,  the  Bureau  issued  a  short  letter  summarily 
 rejecting  the  request  for  clarification,  stating: 

 The  Commission's  request  asks  for  basic  information  that  Mr.  Kay  would  have 
 readily  available  if  he  is  indeed  providing  communication  services  to  customers. 
 In  fact,  such  information  would  be  a  necessity  in  order  to  even  issue  monthly  bills 
 to  users  of  the  many  systems  for  which  he  is  apparently  licensed. 

 The  Bureau  refused  to  extend  the  response  date  beyond  June  3.  ID  at    40;  WTB  Exh.  8. 
 26.  Brown  responded  to  the  Commission  the  same  day.  Brown  again  sought 
 clarification  of  items  in  the  January  31  308(  b)  Letter.  With  respect  to  specific  items,  he 
 asked  for  the  following  clarifications:  (1)  what  licensee  information  the  Commission  did 
 not  possess,  (2)  what  information  about  the  grant  and  construction  of  the  licenses  the 
 Commission  did  not  have,  (3)  and  (4)  the  relevance  of  the  Forest  Service  permits,  and  (5) 
 whether  the  Commission  would  keep  Kays  user  information  confidential.  As  to  item 
 (6),  Brown  did  not  seek  further  clarification,  but  stated  that:  Mr.  Kay  states  that  his 
 business  records  substantiate  that  a  total  of  in  excess  of  7,000  mobile  units  and  control 
 stations  operate  in  association  with  all  of  the  facilities  which  he  and  his  companies  own 
 and  operate.  WTB  Exh.  10  at  3.  Brown  urged  that  a  failure  to  provide  further 
 information  did  not  warrant  a  revocation  proceeding.  ID  at    40;  WTB  Exh.  10. 

 27.  The  following  day,  May  27,  1994,  the  Bureau  answered  that  no  clarification 
 was  required.  ID  at    40;  WTB  Exh.  10.  The  Bureau  further  stated: 
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 Regarding  the  request  for  user  information,  we  have  no  intention  of  disclosing 
 Mr.  Kays  proprietary  business  information,  such  as  customer  lists,  except  to  the 
 extent  that  we  would  be  required  by  law  to  do  so.  Our  intent  is  not  to  divulge  Mr. 
 Kays  proprietary  business  information  to  competitors  or  any  non-  Commission 
 personnel  .  .  .  . 

 WTB  Exh.  10  at  1.  The  Bureau  termed  Browns  answer  to  item  (6)  ludicrous  and 
 frivolous.  Id.  at  1-  2. 

 28.  On  June  2,  1994,  Brown  again  responded  to  the  Bureau.  As  to  item  (1), 
 Brown  explained  that  Kay,  in  addition  to  holding  licenses  in  his  own  name,  had  an 
 interest  in  two  closely  held  corporations,  Buddy  Corp.  and  Oat  Trunking  Group,  Inc.,  and 
 that  Kay  "does  not  operate  any  station  of  which  either  he  or  the  two  above  named 
 corporations  is  not  the  licensee.  WTB  Exh.  11  at  1.  The  letter  further  explained  that 
 Kay  did  not  hold  any  license  that  the  Commission  would  not  already  have  in  its  own 
 records.  ID  at    43;  WTB  Exh.  11. 

 29.  Brown  also  renewed  his  various  legal  objections  to  the  Bureau's  request  for 
 information  regarding  Kay's  U.  S.  Forest  Service  permits,  including  relevancy  and  the 
 Bureau's  refusal  to  disclose  the  particulars  of  the  alleged  complaints  against  Kay.  Brown 
 claimed  that  there  is  no  requirement  that  Kay  maintain  records  of  license  grant  dates,  that 
 the  Commission  already  had  the  license  grant  dates  in  its  own  records,  and,  to  the  extent 
 Commission  rules  required  Kay  to  report  construction  completion  dates,  he  had  already 
 done  so  at  the  appropriate  times.  ID  at    43;  WTB  Exh.  11.  Brown  stated  that:  Had  any 
 license  held  by  Mr.  Kay  cancelled  automatically  because  he  failed  to  construct  an 
 authorized  station  in  a  timely  manner,  we  respectfully  submit  that  such  an  automatic 
 action  of  law  could  not,  in  any  way,  raise  a  question  concerning  his  qualifications  to  be  a 
 Commission  licensee.  ID  at    43;  WTB  Exh.  11  at  3. 

 30.  In  response  to  the  Bureau's  request  for  Kay's  loading  numbers,  Brown  again 
 stated  that  Kay's  combined  systems  served  a  grand  total  of  7,000  units,  but  he  asserted 
 that  providing  specific  loading  information  as  of  January  31,  would  not  prove  or  disprove 
 any  complaint  the  Bureau  may  have  received,  because  the  systems  were  in  continual 
 churn  with  customers  being  added  and  deleted  all  the  time.  Brown  again  claimed  that 
 loading  was  not  a  factor  as  to  any  of  the  specific  pending  applications.  ID  at    44;  WTB 
 Exh.  11. 

 31.  Brown  once  again  stated  that  Kay  was  not  convinced  that  the  Commission 
 would  keep  confidential  any  information  that  the  Commission  requested.  WTB  Exh.  11 
 at  5.  Brown  again  cited  Bureau's  unexplained  request  for  50  copies  of  Kays  response. 
 Brown  submitted  only  the  number  of  copies  of  his  June  2,  1994,  letter  required  by  47 
 C.  F.  R.    1.  51.  He  also  included  the  copyright  notice  across  the  bottom  of  each  page.  ID 
 at    45;  WTB  Exh.  11. 
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 32.  Finally,  Brown  asserted  that  the  Bureaus  refusal  to  disclose  the  complaints 
 on  which  the  308(  b)  Letter  was  based,  its  refusal  to  postpone  the  response  date  until  a 
 court  resolved  Kays  FOIA  litigation,  its  refusal  to  grant  Kay  criminal  immunity,  and  its 
 stated  intention  to  initiate  hearing  proceedings  against  Kay  violated  Kays  constitutional 
 rights.  ID  at    46;  WTB  Exh.  11. 

 33.  The  Bureau  sent  Brown  a  responsive  letter  on  June  10,  1994.  The  Bureau 
 labeled  Kays  response  "woefully  inadequate"  and  threatened  that  it  "places  Mr.  Kay  in 
 jeopardy  of  Commission  sanctions  which  include  revocation  of  licenses,  monetary 
 forfeiture,  or  both."  WTB  Exh.  12  at  1.  The  Bureau  stated  that  any  information  submitted 
 would  be  kept  confidential  and  dropped  its  demand  for  50  copies  of  any  response, 
 requiring  only  1  original  and  1  copy.  The  Bureau  again  claimed  that  loading  information 
 was  readily  available  to  Kay  and  required  a  further  response  by  July  1.  The  Bureau 
 indicated  that  it  would  accept  a  user  list  as  of  any  date  convenient  to  Mr.  Kay.  WTB 
 Exh.  12  at  1.  [Emphasis  in  the  original.]  ID  at    47;  WTB  Exh.  12. 

 34.  On  June  17,  1994,  Brown  wrote  to  the  Bureau,  informing  it  that  a  Federal 
 District  court  had  required  the  Commission  to  submit  a  Vaughn  Index  of  documents 
 withheld  from  Kays  FOIA  request.  Brown  requested  that  Kays  disclosure  date  be 
 extended  until  30  days  after  conclusion  of  the  FOIA  litigation.  ID  at    48;  WTB  Exh.  13. 
 The  Bureau  refused  on  June  22,  1994,  noting  that  it  had  released  over  1,000  documents  to 
 Kay.  The  Bureau  characterized  Browns  requests  as  dilatory  tactics  that  exposed  Kay 
 to  the  threat  of  revocation.  ID  at    49;  WTB  Exh.  14  at  1.  Finally,  on  June  30,  1994, 
 Brown  responded  again.  As  to  each  of  the  specific  items  in  the  308(  b)  Letter,  Brown 
 referred  the  Bureau  to  earlier  responses  filed  on  behalf  of  Kay.  Brown  reiterated  his  legal 
 objection  on  the  ground  that  the  specifics  of  the  alleged  complaints  had  not  been 
 disclosed  to  Kay.  He  stated  that:  Mr.  Kay  respectfully  reports  that  there  is  no  date 
 subsequent  to  January  31,  1994  for  which  the  submission  of  the  requested  information 
 would  be  convenient.  WTB  Exh.  15  at  3. 

 35.  The  ALJ  found  that  Kays  responses  did  not  violate  either  47  U.  S.  C.    308(  b) 
 or  47  C.  F.  R.    1.  17.  He  found  that  the  Bureau  had  not  alleged  that  Kays  responses 
 constituted  misrepresentations  or  lacked  candor.  ID  at    175-  76.  He  criticized  the 
 Bureaus  308(  b)  Letter  as  exceeding  the  permissible  bounds  of  Commission  inquiry,  as 
 defined  by  Stahlman  v.  FCC,  126  F.  2d  123  (D.  C.  Cir.  1942),  in  that  they  did  not 
 specifically  inform  Kay  of  the  conduct  in  question  and  narrowly  focus  to  obtain 
 necessary  information.  ID  at    177-  79.  The  ALJ  held  that,  instead,  the  Bureau  had 
 engaged  in  a  fishing  expedition  with  the  hope  that  something  would  turn  up.  ID  at   
 179.  He  faulted  the  Bureau  for  not  explaining  particular  complaints,  for  requiring 
 sensitive  information,  such  as  customer  lists  and  technical  configurations,  and  for 
 ignoring  Kays  requests  for  modification.  He  said  that  Kays  actions  cannot  be  viewed  as 
 an  act  of  defiance.  ID  at    179.  The  ALJ  also  found  that  Kay  disclosed  nearly  36,000 
 documents  during  discovery  and  that  Kays  ability  to  respond  to  the  308(  b)  Letter  had 
 been  impaired  by  his  limited  computer  capabilities  and  the  aftereffects  of  the  Northridge 
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 earthquake.  The  ALJ  also  found  that  Kay  had  legitimate  concerns  about  whether  data 
 would  be  kept  confidential.  These  included  the  breadth  of  the  Bureaus  request,  the 
 Bureau  failure  to  provide  requested  assurances,  its  demand  for  50  copies  of  responses, 
 and  an  incident  in  which  the  Bureau  apparently  frustrated  a  finders  preference  request 
 filed  by  Kay.  ID  at    180-  81. 

 36.  The  Bureau  challenges  the  ALJs  adverse  findings.  The  Bureau  denies  that 
 the  308(  b)  Letter  constitutes  an  unlawful  fishing  expedition.  According  to  the  Bureau, 
 the  Commission  has  already  indicated  its  approval  of  the  308(  b)  Letter  in  the  hearing 
 designation  order  and  other  rulings  in  this  proceeding.  The  Bureau  asserts  that  charges  of 
 Bureau  misconduct  are  irrelevant  to  the  issues  in  this  proceeding.  The  Bureau  disputes 
 the  ALJs  findings  that  the  308(  b)  Letter  sought  excessive  detail  about  Kays  technical 
 operations  or  that  compliance  was  excessively  burdensome.  The  Bureau  asserts  that  Kay 
 could  have  complied  with  the  request  by  furnishing:  (1)  a  chart  of  call  signs  and  license 
 names,  (2)  copies  of  Forest  Service  permits,  (3)  a  user  list  showing  the  number  of  mobile 
 units  for  each  user,  and  (4)  invoices  supporting  the  loading  of  Kays  systems  on  one 
 specified  date.  The  Bureau  also  takes  issue  with  the  suggestion  that  it  should  have 
 limited  its  inquiry  to  the  facilities  involved  in  specific  complaints. 

 37.  The  Bureau  discounts  Kays  various  excuses  for  noncompliance  with  the 
 308(  b)  request.  The  Bureau  contends  that  Kay  had  no  valid  concerns  about 
 confidentiality,  since  the  Bureau  twice  assured  Kay  in  writing  that  sensitive  material 
 would  be  kept  confidential.  The  Bureau  also  argues  that  the  Northridge  earthquake  did 
 not  justify  noncompliance.  According  to  the  Bureau,  Kay  did  not  rely  on  the  earthquake 
 to  justify  noncompliance  and  Kay  could  have  complied  despite  the  earthquake. 

 38.  Kay  responds  that  the  Commission  intended  to  permit  inquiry  into  the 
 propriety  of  the  308(  b)  Letter  and  to  permit  Kay  to  show  that  he  was  aggrieved  by  the 
 Bureaus  conduct.  Kay  argues  that  Congress  did  not  intend  308(  b)  to  be  a  blank  check 
 for  requesting  information.  He  further  argues  that  compliance  with  a  308(  b)  Letter  is 
 voluntary  and  that  the  Commission  can  issue  a  subpoena,  enforceable  in  the  federal 
 courts,  if  it  wants  to  compel  disclosure.  Kay  characterizes  the  308(  b)  Letter  as  overbroad 
 and  excessively  burdensome,  requiring  production  of  billing  records,  contracts,  and 
 invoices  regarding  more  than  150  facilities.  In  Kays  view,  the  Bureau  should  have 
 limited  its  requests  to  the  facilities  involved  in  specific  complaints. 

 39.  Additionally,  Kay  cites  several  mitigating  factors.  He  observes  that  he 
 provided  some  38,000  documents  after  designation  for  hearing,  which  demonstrates  that 
 he  had  no  intention  to  deceive  the  Commission.  He  asserts  that  the  Bureau  gave  him 
 ample  reason  to  be  concerned  about  confidentiality,  especially  in  light  of  its  apparent  bad 
 faith  and  animosity  towards  Kay.  Kay  asserts  that  the  Northridge  earthquake  severely 
 disrupted  his  business,  personal  life,  and  computer  system,  making  it  difficult  for  him  to 
 comply  with  the  request.  In  this  regard,  he  submits  that  compliance  with  the  request 
 required  three  months  of  staff  time. 
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 40.  We  find  that  Kay  violated  his  obligations  under  47  U.  S.  C.    308(  b)  and  47 
 C.  F.  R.    1.17.  Licensees  have  an  obligation  to  respond  to  Commission  inquiries.  See 
 Fox  Television  Stations,  Inc.,  10  FCC  Rcd  8452,  8508    139  (1995).  See  also  47  C.  F.  R. 
   1.17  (  The  Commission  or  its  representatives  may,  in  writing,  require  .  .  .  written 
 statements  of  fact.  .  .  .  No  applicant,  permittee  or  licensee  shall  in  any  response  to 
 Commission  correspondence  or  inquiry  .  .  .  make  any  .  .  .  willful  material  omission 
 bearing  on  any  matter  within  the  jurisdiction  of  the  Commission.)  We  recognize  that  a 
 licensee  must  be  free  to  assert  a  principled  basis  for  resisting  requests  for  information, 
 such  as  a  contention  that  the  information  is  privileged  or  that  production  would  be  unduly 
 burdensome.  However,  a  licensees  belief  that  the  request  is  immaterial  under  its  own 
 interpretation  of  law  is  not  a  sufficient  basis  for  failing  to  answer  questions.  Fox 
 Television  Stations,  Inc.,  10  FCC  Rcd  at  8508    138-  39.  The  Commission  is  not 
 required  to  bargain  wit  h  its  licensees  for  the  informat  ion  to  which  it  is  ent  it  led  in  order 
 properly  to  carry  out  its  functions.  Carol  Music,  Inc.,  37  FCC  379,  384  (1964). 
 Although  the  Commission  has  the  authority  to  seek  information  by  formal  means,  such  as 
 subpoena,  where  necessary,  the  Commission  expects  its  licensees  to  recognize  its 
 authority  and  to  cooperate  with  staff-  conducted  informal  investigations.  See  PTL  of 
 Heritage  Village,  71  FCC  2d  324,  329    12  (1979).  See  also  RKO  General,  Inc.  v.  FCC, 
 670  F.  2d  215,  229  (D.  C.  Cir.  1981)  (  As  a  licensing  authority,  the  Commission  is  not 
 expected  to  play  procedural  games  with  those  who  come  before  it  in  order  to  ascertain 
 the  truth  .  .  .  .  license  applicants  may  not  indulge  in  common-  law  pleading  strategies  of 
 their  own  devise).  Moreover,  the  failure  to  provide  information  known  to  be  relevant  or 
 a  failure  to  respond  based  on  a  facially  implausible  theory  may  constitute  lack  of  candor. 
 Fox  Television  Stations,  Inc.,  10  FCC  Rcd  at  8508    137. 

 41.  Kays  responses  to  the  Bureaus  inquiries  disclosed  virtually  none  of  the 
 information  requested.  He  failed  to  provide  a  list  of  calls  signs  based  solely  on  his  belief 
 that  the  Bureau  should  look  up  the  information  itself  and  because  he  declined  to  perform 
 secretarial  sorting  tasks.  WTB  Exh.  3  at  1.  He  declined  to  provide  information  about 
 which  of  his  facilities  were  located  on  Forest  Service  land  and  whether  he  had  permits  for 
 the  use  of  such  land,  based  on  the  unavailing  theory  that  the  Commission  lacked  authority 
 to  inquire  whether  a  licensee  has  obtained  necessary  governmental  authorizations,  such  as 
 permits  from  the  U.  S.  Forest  Service.  In  fact,  the  Commission  clearly  has  jurisdiction  to 
 determine  whether  licensees  are  violating  federal  permit  requirements  and  whether  the 
 licensees  have  constructed  facilities  without  authorization.  The  case  cited  by  Kay,  Fort 
 Collins  Telecasters,  103  FCC  2d  978,  980-  81    3  (Rev.  Bd.  1986),  does  not  hold,  as  Kay 
 asserted  in  his  response  (WTB  Exh.  3  at  2),  that  governmental  consent  to  operation  of  a 
 facility  on  its  land  was  irrelevant;  it  holds  that  the  applicant  in  that  case  had  demonstrated 
 reasonable  assurance  of  obtaining  such  consent.  See  also  Arizona  Number  One  Radio, 
 Inc.,  103  FCC  2d  550,  553-  54    3-  4  (Rev.  Bd.  1976).  In  any  event,  as  noted  above, 
 Kays  unilateral  belief  that  the  information  is  not  relevant  does  not  justify  nondisclosure. 
 His  suggestion  that  if  the  Commission  desires  to  ascertain  [which  facilities  are  located 
 on  U.  S.  Forest  Service  land],  we  respectfully  suggest  that  it  may  desire  to  plot  each 
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 station  on  a  map  which  shows  the  boundaries  of  the  U.  S.  Forest  Service  land  was 
 inconsistent  with  the  licensees  responsibilities  and  likely  intended  to  be  sarcastic  rather 
 than  a  legitimate  suggestion.  8  Equally  unavailing  is  Kays  response  that  he  was  not 
 required  to  maintain  certain  records,  such  as  documentation  of  grant  dates.  WTB  Exh.  3 
 at  2.  Investigations  frequently  require  examination  of  material  not  required  to  be 
 maintained  by  Commission  rules.  PTL  of  Heritage  Village,  71  FCC  2d  at  327    8. 

 42.  Kays  failure  to  provide  this  information,  as  well  as  that  regarding  customers 
 and  loading  was  also  based  on  three  more  general  rationales:  (1)  the  argument  that  the 
 requests  were  overbroad  because  they  were  not  based  on  specific  complaints,  (2) 
 concerns  over  confidentiality,  and  (3)  issues  regarding  the  burden  and  practicality  of 
 providing  the  information.  We  disagree  with  Kay  and  with  the  ALJs  treatment  of  these 
 factors.  9  As  to  the  first  issue,  both  Kay  and  the  ALJ  rely  on  the  following  dictum  in 
 Stahlman  v.  FCC,  126  F.  2d  124,  128  (D.  C.  Cir.  1942),  as  indicating  that  the  Bureaus 
 inquiry  was  impermissibly  broad: 

 .  .  .  [W]  e  do  not  mean  to  hold  or  to  suggest  that  the  Commission  is  authorized  to 
 require  appellant  or  other  witnesses  whom  they  may  summon  to  bare  their 
 records,  relevant  or  irrelevant,  in  the  hope  that  something  will  turn  up  .  .  .  but  only 
 that  the  Commission  may,  without  interference,  seek  through  an  investigation  of 
 its  own  making  information  properly  applicable  to  the  legislative  standards  set  up 
 in  the  [Communications]  Act. 

 43.  We  do  not  read  that  case  as  saying  that  the  Commission  may  only  seek 
 information  relevant  to  specific  complaints.  We  believe  that  it  is  reasonably  within  our 
 discretion  (and  the  Bureaus)  to  determine  that  the  existence  of  numerous  complaints 
 about  a  licensee  may  warrant  a  broad  investigation  of  that  licensees  compliance.  See 
 Tidewater  Radio  Show,  Inc.,  75  FCC  2d  670,  677    15  (1980)  (.  .  .  full  authority  and 
 power  are  given  to  the  Commission  to  institute  an  inquiry  on  its  own  motion,  with  or 
 without  complaint,  as  to  any  matter  falling  within  its  jurisdiction.  [Footnote  omitted]. 
 See  Stahlman  .  .  .  .  ).  In  any  event,  as  noted  above,  Kays  unilateral  belief  that  the 
 Bureaus  inquiry  was  overbroad  did  not  justify  a  failure  to  respond.  If  Kay  objected  to 
 the  scope  of  the  Bureaus  inquiry,  he  should  have  sought  Commission  review,  as  he  did 
 following  designation  for  hearing.  See  James  A.  Kay.  Jr.,  13  FCC  Rcd  16369  (1998). 

 8  We  are  similarly  troubled  by  Kays  response  to  the  Bureaus  request  that  he  explain  the  applicability  of 
 the  copyright  law  to  his  use  of  a  copyright  notice  on  his  correspondence.  Kays  former  attorney 
 responded:  .  .  .  we  must  respectfully  decline  to  advise  the  Commission  concerning  its  obligations  under 
 the  law  of  copyright.  We  can,  if  the  Commission  requests,  refer  the  Commission  to  a  firm  which  practices 
 in  the  field  of  copyright  and  with  whose  services  some  of  our  clients  have  expressed  satisfaction.  WTB 
 Exh.  5  at  2.  This  response  is  anything  but  respectful.  9 
 The  dissent  asserts  that  the  Commission  should  defer  to  Judge  Chachkin's  findings  regarding  the  adequacy 
 of  Kay's  responses  to  the  Bureau's  308(  b)  letter  of  inquiry.  We,  however,  disagree  with  the  legal  standards 
 applied  by  Judge  Chachkin  in  evaluating  Kay's  responses  and  therefore  find  that  deference  is  unwarranted 
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 44.  We  also  disagree  with  the  ALJs  treatment  of  confidentiality.  The 
 Commissions  rules  provide  procedures  under  which  a  person  submitting  information 
 may  request  confidentiality.  47  C.  F.  R.    0.  459.  These  rules  do  not,  however,  authorize  a 
 person  to  withhold  information  from  the  Commission  on  that  basis.  See  47  C.  F.  R.   
 0.459(  e)  (where  the  Commission  denies  a  request  for  confidentiality,  the  person 
 submitting  the  information  may  request  its  return  only  if  the  material  was  submitted 
 absent  any  direction  by  the  Commission).  Thus,  Kays  concerns  about  confidentiality  did 
 not  justify  withholding  information.  In  any  event,  the  Bureau  twice  expressly  granted 
 Kays  request  for  confidentiality.  WTN  Exh.  6  at  1-  2;  WTB  Exh.  10  at  1.  The  ALJs 
 extensive  analysis  of  Kays  doubts  about  the  Bureaus  intention  to  provide  confidentiality 
 (ID  at    16,  23-  37,  45,  181)  are  beside  the  point.  Whatever  doubts  Kay  might  have  had 
 did  not  justify  nondisclosure.  As  noted,  Kay  should  have  sought  Commission 
 intervention  if  he  desired  to  pursue  this  issue. 

 45.  As  a  related  matter,  Kay  provides  no  support  for  justifying  the  withholding  of 
 information  because  the  Commission  did  not  grant  him  immunity  from  criminal 
 prosecution  or  forfeiture.  Kays  lawyer  stated: 

 In  view  of  the  reason  stated  by  the  Commission  [i.  e.,  to  determine  Kays 
 qualifications  to  be  a  licensee]  .  .  .  please  also  assure  us  in  writing  that  that  the 
 information  requested  will  be  used  solely  to  determine  whether  Mr.  Kay  is 
 qualified  to  be  a  licensee  and  that  submission  of  the  requested  information  will 
 immunize  Mr.  Kay  against  any  forfeiture  action  by  the  Commission  or  any 
 criminal  prosecution. 

 Kay  did  not  claim,  however,  that  providing  the  requested  information  would,  in 
 fact,  subject  him  to  criminal  prosecution  in  violation  of  his  Fifth  Amendment  right 
 against  self-  incrimination.  See  Lefkowitz  v.  Cunningham,  431  U.  S.  801,  805  (1977)  (the 
 state  may  not  compel  testimony  by  threatening  to  impose  administrative  sanctions  unless 
 the  constitutional  privilege  against  self-  incrimination  is  surrendered).  He  therefore  had 
 no  foundation  for  requesting  immunity.  In  any  event,  the  right  against  self-  incrimination 
 applies  only  to  the  threat  of  criminal  prosecution  and  not  to  administrative  or  civil  action, 
 such  as  forfeiture.  See  United  States  v.  Balsys,  524  U.  S.  666,  671  (1998).  Thus,  Kay  had 
 no  basis  to  request  immunity  against  forfeiture. 

 46.  We  reject  Kays  suggestion,  apparently  endorsed  by  the  ALJ,  10  that  licensees 
 of  the  channels  in  question  here  are  not  required  to  track  the  loading  on  their  facilities. 
 The  provisions  of  47  C.  F.  R.    90.  135(  a)(  5)  (1994),  in  effect  at  the  time,  11  specified  that: 

 10  See,  e.  g.,  ID  at    179,  in  which  the  ALJ  concludes:  Under  the  circumstances,  Kay  cannot  be  faulted  for 
 raising  legal  objections  and  for  failing  to  provide  all  of  the  information  sought  [involving  all  of  Kays  152 
 licenses].  In  this  connection,  the  findings  establish  that  Kay  did  not  have  the  computer  capability  to 
 provide  the  Bureau  the  information  it  sought.  The  ALJ  thus  treated  Kays  failure  to  have  a  computer 
 system  capable  of  tracking  the  loading  on  his  stations  as  a  mitigating  circumstance.  11 
 The  section  was  later  amended.  See  Biennial  Regulatory  Review,  13  FCC  Rcd  21027  (1998). 
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 (a)  The  following  changes  in  authorized  stations  require  an  application  for 
 modification  of  license: 

 .  .  .  . 
 (5)  .  .  .  for  systems  operating  on  non-  exclusive  assignments  in  the  470-  512  MHz, 
 800  MHz  or  900  MHz  bands,  a  change  in  the  number  of  mobile  transmitters  .  .  .  . 

 47.  In  retaining  this  provision  for  shared  channels,  such  as  Kays,  while 
 eliminating  it  for  exclusive  channels,  the  Commission  observed  that  the  provision  is 
 intended  to  maintain  the  integrity  of  our  licensing  records  .  .  .  .    Amendment  of  Part  90 
 of  the  Commissions  Rules,  7  FCC  Rcd  6344,  6347  n.  40  (1992).  It  clearly  contemplates 
 that  the  licensee  must  keep  track  of  the  loading  on  its  facilities  in  order  to  file  the 
 necessary  modification  applications  so  that  the  Commissions  records  accurately  reflect 
 the  availability  of  the  channels.  In  that  same  report  and  order,  which  eliminated  the 
 routine  submission  of  end  user  lists,  the  Commission  further  noted: 

 Information  regarding  eligibility  of  end  users  and  confirmation  of  whether  a 
 system  is  really  serving  those  end  users  or  is  paper  loading  are  important  parts 
 of  our  spectrum  management  responsibilities.  These  issues,  however,  generally 
 arise  in  the  context  of  compliance  action  and,  in  such  instances,  we  obtain 
 information  directly  from  the  licensee,  pursuant  to  [308(  b)]  .  .  .  . 

 Id.  at  6345  n.  21.  Moreover,  for  the  shared  channels  involved  in  this  case,  it  is  appropriate 
 to  examine  snapshots  of  loading  on  particular  days.  The  six-  month  averaging  rule 
 applicable  to  trunked  SMR  stations  (47  C.  F.  R.    90.  658)  does  not  apply  to  conventional 
 stations,  because  it  is  necessary  to  know  whether  the  channels  involved  are  available  for 
 shared  use.  See  Amendment  of  Part  90  of  the  Commissions  Rules,  7  FCC  Rcd  5558, 
 5562    24  (1992).  It  should  therefore  come  as  no  surprise  to  Kay  or  others  to  be  required 
 to  produce  such  documentation.  Over  the  past  several  years,  the  Commission  has 
 attempted  to  reduce  the  routine  reporting  requirements  of  its  licensees.  As  a  result, 
 operators,  such  as  Kay,  do  not  have  to  submit  annual  or  other  periodic  reports  of  their 
 loading,  such  as  the  Commission  otherwise  might  have  seen  fit  to  impose  in  the  past. 
 The  Commission  has  made  clear,  however,  that  licensees  must  be  able  to  produce  such 
 information  when  requested.  Limiting  the  demand  for  such  information  to  situations  in 
 which  a  licensees  compliance  has  been  questioned  represents  a  reasonable  balancing  of 
 the  need  for  this  information  to  effectuate  the  Commissions  public  interest 
 responsibilities  and  the  burden  on  licensees  of  submitting  this  information. 

 48.  Although  Kays  responses  raised  some  legitimate  points,  such  as  the  need  to 
 specify  a  relevant  time  period  and  the  practical  difficulties  involved  in  assembling  large 
 amounts  of  data,  especially  in  light  of  the  disruption  caused  by  the  Northridge 
 earthquake,  they  do  not  manifest  a  good  faith  intent  to  provide  the  requested  information. 
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 The  April  7,  1994  response  asserts  that  as  a  result  of  fluctuations  in  use  and  other  factors: 
 .  .  .  at  any  given  instant  of  time,  Mr.  Kay  may  not  know  the  number  of  mobile  units 
 operated  on  each  of  his  stations.  WTB  Exh.  3  at  5.  That  response  further  asserts: 

 .  .  .  the  Commissions  Rules  require  a  licensee  to  know  the  loading  on  a  given 
 channel  only  at  the  time  he  requests  additional  channels  or  at  the  time  he  requests 
 renewal  of  the  authorization  .  .  .  .  Since  the  Commissions  rules  do  not  require  Mr. 
 Kay  to  know  the  loading  on  his  stations  except  at  those  specified  times,  we 
 respectfully  submit  that  the  Commission  is  not  authorized  to  request  such 
 information  .  .  .  . 

 Id.  at  6. 
 49.  On  June  3,  having  been  given  additional  time  and  clarification,  Kay  did  not 
 give  an  adequate  response.  He  merely  indicated  that:  Mr.  Kay  states  that  his  business 
 records  substantiate  that  a  total  in  excess  of  7,000  mobile  units  and  control  stations 
 operate  in  association  with  all  of  the  facilities  which  he  and  his  companies  own  and 
 operate.  WTB  Exh.  9  at  3.  When  the  Bureau  aptly  pointed  out  that  this  response  was 
 hardly  helpful  (WTB  Exh.  10  at  1),  Kay  declined  to  supply  information  as  to  loading 
 on  the  specified  date  of  January  31,  1994.  He  instead  complained  that  the  Bureau  did  not 
 specify  the  date  and  facilities  involved  in  each  individual  complaint  and  stated  that 
 because  of  the  continual  churn  of  customers:  such  information  would  neither  prove  nor 
 disprove  the  complaints  which  served  as  the  expressly  stated  basis  for  the  [308(  b) 
 request].  WTB  Exh.  11  at  5.  Kay  thus  refused  to  provide  information  on  the  loading  of 
 his  systems  generally. 

 50.  Kays  failures  to  give  productive  responses  to  the  Bureaus  inquiries  warrant 
 a  finding  that  he  acted  in  a  recalcitrant  manner  in  violation  of  47  U.  S.  C.    308(  b)  and  47 
 C.  F.  R.    1.  17,  and  thereby  failed  to  meet  his  responsibilities  as  a  licensee.  We  note,  in 
 this  regard,  as  did  the  ALJ,  that  the  Bureau  does  not  make  the  further  case  that  Kays 
 responses  contained  misrepresentations  or  lacked  candor.  The  Bureau  has  not 
 demonstrated  that  Kays  unresponsiveness  reflected  a  conscious  intent  to  conceal  known 
 violations  of  the  Commissions  technical  rules.  12  Accordingly,  we  do  not  deem  Kays 
 violations  disqualifying.  We  will  discuss  the  ultimate  impact  of  his  violations  at 
 paragraph  100,  infra. 

 V.  SYSTEM  LOADING  ISSUE 
 51.  Of  the  various  issues  originally  designated  concerning  the  construction  and 
 operation  of  Kays  stations,  only  the  question  of  Kays  system  loading  remains  before 

 12  As  to  the  statement  in  the  June  24  letter,  that  Kay  did  not  operate  stations  other  than  those  licensed  to 
 him,  we  believe  that  this  matter  is  best  considered  in  the  context  of  the  misrepresentation  issue.  See 
 paragraph  99,  infra. 
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 us.  13  The  ALJ  made  findings  concerning  the  legal  relevance  of  system  loading,  i.  e.,  the 
 number  of  mobile  units  operating  in  connection  with  a  licensed  facility.  At  relevant 
 times,  one  of  the  items  on  an  application  for  a  private  carrier  UHF  repeater  license  or  a 
 conventional  SMR  800  MHz  repeater  license  requested  the  number  of  mobile  units  to  be 
 authorized.  ID  at    85.  Thus,  Kay  filed  applications  specifying  the  pertinent  number  of 
 mobile  units.  ID  at    87. 

 52.  The  ALJ  found  that  the  Bureau  submitted  into  evidence  two  exhibits  (WTB 
 Exhs.  19  and  347)  that  were  intended  to  document  the  actual  loading  of  Kays  licensed 
 facilities  in  contrast  to  the  numbers  specified  in  Kays  applications  and  licenses.  ID  at   
 88.  The  data  contained  in  these  exhibits  were  derived  from  Kays  computer-  based  billing 
 system.  The  ALJ  found  that  the  billing  system  did  not  provide  a  complete  or  accurate 
 accounting  of  the  loading  on  Kays  system.  ID  at    88-  89,  91-  92.  Of  the  152  call  signs 
 at  issue  in  this  proceeding,  the  ALJ  made  findings  as  to  the  specific  number  of  mobiles 
 operating  on  seven  of  Kays  trunked  SMR  systems,  which  he  found  to  be  fully  loaded. 
 ID  at    90.  He  made  no  findings  as  to  the  specific  number  of  mobiles  operating  on  any  of 
 Kays  non-  trunked  systems. 

 53.  The  ALJ  rejected  the  Bureaus  assertion  that  adverse  findings  should  be  made 
 against  Kay  based  on  47  C.  F.  R.    90.313  or  90.633,  both  relating  to  conventional  (i.  e., 
 non-  trunked)  facilities.  He  concluded  that  these  rules  do  not  impose  loading  requirements 
 per  se.  ID  at    186-  89. 

 54.  According  to  the  ALJ,  the  record  does  not  show  that  Kay  submitted  any 
 application  that  would  have  required  Kay  to  provide  information  as  to  the  loading  on  a 
 particular  channel.  The  ALJ  rejected  the  Bureaus  assertion  that  Kay  did  not  maintain  the 
 information  that  would  be  needed  to  demonstrate  loading  in  the  event  that  he  filed  such 
 an  application.  According  to  the  ALJ,  Kay  could  have  made  such  a  showing  based  on  his 
 billing  system  and  various  paper  records,  although  it  was  impractical  for  him  to  do  so  for 
 all  152  stations  at  once,  as  the  Bureau  required.  ID  at    190. 

 55.  The  ALJ  further  found  that,  even  assuming  that  the  rules  contained  a  specific 
 loading  requirement,  the  Bureau  used  invalid  means  to  measure  Kays  loading.  In  the 
 ALJs  view,  loading  cannot  validly  be  measured  based  on  a  snapshop  of  a  single  point  in 
 time.  Rather,  loading  should  be  measured  based  on  average  loading  over  a  six  month 
 period.  ID  at    191.  Moreover,  the  ALJ  found  that  the  Bureau  erred  in  measuring 

 13  The  ALJ  made  findings  under  an  issue  concerning  the  timely  construction  and  permanent  discontinuance 
 of  operation  of  Kays  facilities.  He  found  that  the  parties  stipulated  that  69  facilities  licensed  under  53  call 
 signs  were  not  in  operation  as  of  May  11,  1995  and  thus  subject  to  automatic  cancellation.  ID  at    219-222. 
 See  WTB  Exh.  290.  See  also  Wireless  Telecommunications  Bureaus  Proposed  Findings  of  Fact  and 
 Conclusions  of  Law  (WTB  PF&  C)  at  44-  46    107-  08.  Kay  indicated  that  these  facilities  were  control 
 stations  or  secondary  base  stations,  rather  than  primary  base  stations.  The  ALJ  accepted  the  Bureaus 
 suggestion  that  these  facilities  be  referred  to  the  staff  for  appropriate  license  maintenance.  ID  at    222. 
 PF&  C  at  111  n.  23.  He  therefore  took  no  other  action  based  on  these  findings  and  the  Bureau  suggests  no 
 other  action. 
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 loading  based  solely  on  Kays  computerized  billing  records  and  ignoring  other,  paper 
 records  that  Kay  disclosed.  The  ALJ  found  that  the  billing  records  did  not  include 
 loaner  or  demo  units,  did  not  include  non-  current  customers,  and  did  not  take  into 
 account  access  to  multiple  repeater  sites.  ID  at    88-  89,  192-  93. 

 56.  Finally,  the  ALJ  found  that  the  Bureau  had  failed  to  demonstrate  that  Kay 
 violated  47  C.  F.  R.    90.  135,  which,  in  any  event,  was  not  mentioned  in  the 
 Commissions  hearing  designation  order.  That  section  requires  certain  licensees  to 
 modify  their  licenses  to  reflect  a  reduction  in  the  number  of  mobile  units.  He  held  that, 
 for  the  reasons  discussed  above,  the  Bureau  failed  to  make  a  valid  demonstration  that 
 Kays  facilities  were  underutilized.  He  also  held  that  the  Bureau  had  not  shown  when 
 Kay  was  supposed  to  seek  modification  of  his  licenses.  ID  at    194-  98. 

 57.  The  Bureau  asserts  that  the  ALJ  failed  to  appreciate  the  significance  of  Kays 
 underutilization  of  his  facilities.  The  Bureau  observes  that  the  channels  in  question  are 
 used  on  a  shared  basis.  According  to  the  Bureau,  it  is  fundamental  to  the  licensing  of 
 shared  channels  that  licensees  must  not  seek  to  retain  unused  authorizations.  In  this 
 regard,  the  Bureau  claims  that  the  data  disclosed  by  Kay  indicate  that  the  number  of 
 mobile  units  actually  used  in  connection  with  his  facilities  is  several  thousand  less  than 
 authorized.  The  Bureau  asserts  that  the  various  factors  cited  by  the  ALJ  do  not  begin  to 
 account  for  a  shortfall  of  this  magnitude,  indicating  that  Kay  had  no  intention  of  sharing 
 the  channels  in  question.  The  Bureau  maintains  that  Kay  had  an  obligation  under  the 
 rules  to  substantiate  the  loading  on  his  facilities. 

 58.  Kay  replies  that  the  Bureau  has  not  shown  when  he  would  be  required  to 
 amend  his  authorizations  to  reflect  reductions  in  the  number  of  mobile  units  served  and 
 argues  that  he  should  not  be  required  to  amend  to  show  temporary  fluctuations  in  use.  He 
 further  argues  that  the  Bureau  ignores  factors  that  explain  the  apparent  shortfall  in 
 utilization,  such  as  economic  conditions,  the  need  to  consult  records  other  than  billing 
 records,  and  channel  sharing. 

 59.  We  have  no  basis  to  find  that  Kay  violated  either  47  C.  F.  R.    90.313  or  47 
 C.  F.  R.    90.  633.  As  the  ALJ  correctly  notes,  neither  of  these  rules  imposes  any  specific 
 requirements  on  licensees.  Section  90.313,  applicable  to  the  470-  512  MHz  band, 
 provides  that  until  a  channel  is  loaded  to  90  mobile  units  it  will  be  available  for 
 assignment  to  other  users  in  the  same  area  on  a  shared  basis.  Section  90.633  similarly 
 provides  for  SMR  facilities  that  where  a  channel  is  not  loaded  to  70  mobile  units  it  will 
 be  available  for  assignment  to  other  users.  As  the  Bureau  suggests,  the  application  of 
 these  rules  requires  that  the  Commissions  licensing  records  accurately  reflect  whether 
 the  channels  are  loaded  to  the  benchmarks  specified  in  the  rules,  and  thus  whether  they 
 are  available  for  sharing.  The  relevant  provisions  do  not,  however,  contain  any  language 
 imposing  a  particular  duty  on  individual  licensees  in  this  regard.  The  Bureau  offers  no 
 support  for  its  assertion  that:  To  comply  with  these  rule  sections  (i.  e.,    90.  313  and 
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 90.633),  a  licensee  must  not  seek  or  retain  authorization  for  unused  slots.  Wireless 
 Telecommunications  Bureaus  Exceptions  and  Brief  at  12. 

 60.  Rather,  as  discussed  in  paragraphs  46-  47,  supra,  the  provisions  of  47  C.  F.  R.   
 90.135(  a)(  5)  (1994),  which  during  the  relevant  time  period,  required  licensees  on  shared 
 channels  to  seek  modification  of  license  to  reflect  changes  in  loading,  protected  the 
 integrity  of  the  Commissions  licensing  records  in  this  regard.  The  Bureaus  attempted 
 showing  that  Kays  actual  loading  did  not  conform  to  that  specified  in  his  licenses 
 appears  relevant  to  Kays  compliance  with    90.135.  This  provision  was  not,  however, 
 included  in  the  hearing  designation  order,  and  the  Bureau  expressly  denies  that  it  is 
 attempting  to  demonstrate  a  violation  of  47  C.  F.  R.    90.135: 

 Contrary  to  the  conclusion  at  I.  D.,    194-  195,  the  Bureau  never  sought  to  present 
 evidence  to  prove  a  Section  90.135  issue  that  was  never  designated.  The  evidence 
 presented  by  the  Bureau  demonstrated  violations  of  Sections  90.313  and  90.633, 
 the  rules  that  require  channel  sharing.  The  fact  that  the  Bureaus  evidence  would 
 also  support  a  showing  that  Section  90.135  was  violated  is  inconsequential. 

 Wireless  Telecommunications  Bureaus  Exceptions  and  Brief  at  14  n.  10.  The  difficulty 
 with  the  Bureaus  statement  is  that  the  relevant  provisions  of  47  C.  F.  R.    90.  313  and 
 90.633  do  not  impose  any  explicit  requirements  on  licensees. 

 61.  We  decline  to  consider  the  issue  of  Kays    90.135  compliance  absent  the 
 designation  of  an  issue.  14  To  do  so  would  risk  depriving  Kay  of  basic  due  process  rights. 
 See  RKO  General,  Inc.  v.  FCC,  670  F.  2d  215,  229  (D.  C.  Cir.  1981)  (.  .  .  reasonable 
 notice  of  a  charge  and  an  opportunity  to  be  heard  in  defense  before  punishment  is 
 imposed  are  basic  to  our  system  of  jurisprudence.  .  .  .  ).  Moreover,  47  U.  S.  C.   
 503(  b)(  4)  requires  that  forfeitures  may  be  imposed  only  pursuant  to  a  notice  of  apparent 
 liability  that  shall  identify  each  specific  provision,  term,  and  condition  of  any  .  .  .  rule  .  . 
 .  which  such  person  apparently  violated  or  with  which  such  person  failed  to  comply.  .  .  .   
 We  will  therefore  not  address  this  matter  further.  15 

 VI.  ABUSE  OF  PROCESS  ISSUE 
 62.  The  ALJ  made  findings  concerning  allegations  that  Kay  filed  applications  in 
 multiple  names  to  avoid  compliance  with  the  Commissions  channel  sharing  and 
 recovery  provisions.  He  found  that  four  individuals  testified  that  Kay  had  engaged  in 
 relevant  conduct. 

 14  As  our  discussion  at  paragraphs  46-  47,  supra,  suggests,  however,  we  disagree  with  the  ALJs  analysis 
 with  regard  to  Kays  obligations  under    90.  135.  We  believe  that  the  rules  clearly  required  Kay  to  track  the 
 loading  of  his  facilities  and  to  seek  modification  of  his  licenses  to  reflect  changes  in  loading.  We  expect 
 Kay  to  comply  with  all  relevant  rules  in  the  future  with  respect  to  his  remaining  UHF  stations.  15 
 Because  we  do  not  reach  the  merits  of  the  loading  issue,  Kays  Motion  for  Leave  to  File  Supplement  to 
 Reply  Exceptions,  which  seeks  to  further  address  this  issue,  is  moot  and  will  be  dismissed. 
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 63.  Roy  Jensen  was  a  former  general  manager  of  Southland  from  1990-  92.  He 
 testified  that  Kay  asked  him  to  sign  an  application  for  a  land  mobile  end  user  license  in 
 the  name  of  Roy  Jensen  dba  Consolidated  Financial  Holdings.  Jensen  denied  that 
 Consolidated  Financial  Holdings  ever  operated  any  radio  devices  and  denies  that  he 
 intended  to  operate  37  mobile  units,  as  specified  in  the  application.  ID  at    94-  96.  Kay 
 testified  that  he  intended  to  help  Jensen  pursue  his  own  business  interests.  ID  at    97. 

 64.  Kevin  Hessman  was  an  employee  of  Southland  from  1990-  93  and  a  friend  of 
 Jensens.  Hessman  testified  that  Kay  and  Jensen  approached  him  and  asked  him  to  sign 
 some  FCC  application  forms  to  help  [Kay]  .  .  .  .    Hessman  claims  that  the  entity 
 specified  on  the  license,  Hessman  Securities,  did  not  exist  and  never  operated  mobiles. 
 ID  at    99-  102.  Kay  testified  that  Hessman  approached  him  to  use  radio  devices  in 
 connection  with  an  off-  hours  security  operation.  ID  at    104. 

 65.  Vincent  Cordaro  worked  for  Southland  from  1991-  95  in  various  capacities 
 including  general  manager.  He  formerly  owned  his  own  two-  way  radio  business.  In 
 November/  December,  1994  Kay  and  Cordaro  entered  into  a  Radio  System  Management 
 and  Marketing  Agreement  under  which  Kay  would  manage  a  repeater  station  licensed  to 
 Cordaro.  A  few  months  earlier,  in  April  1994,  Kay  filed  an  application  (which  was, 
 however,  dated  November  11,  1992)  for  the  assignment  of  the  repeater  station  from 
 Cordaro  to  Kay.  Cordaro  claimed  that  Kay  induced  him  to  sign  a  blank  application  form 
 and  did  not  consent  to  the  assignment.  He  also  testified  that  Kay  had  asked  him  to  sign 
 blank  forms  on  other  occasions.  ID  at    107-  13.  Kay  participated  in  filing  applications 
 in  the  name  of  Vince  Cordaro  dba  VSC  Enterprises.  Cordaro  testified  that  VSC  in  fact 
 never  used  radio  devices.  ID  at    115-  16,  121. 

 66.  Carla  Marie  Pfeifer  and  Kay  were  friends.  In  1990,  Kay  assisted  Pfeifer  in 
 obtaining  a  repeater  license,  pursuant  to  an  arrangement  under  which  Kay  constructed  the 
 station  and  marketed  its  services.  Kay  and  Pfeifer  shared  in  the  revenues.  A  number  of 
 documents  were  entered  into  evidence  that  purported  to  bear  Pfeifers  signature,  but,  as  to 
 which,  Pfeifer  questioned  whether  the  signature  was  hers.  Kay  denied  signing  any 
 document  in  Pfeifers  name.  ID  at    125-  30. 

 67.  The  ALJ  found  that  Kay  had  a  factual  basis  for  believing  that  Jensen, 
 Hessman,  and  Cordaro  were  engaged  in  or  intended  to  engage  in  their  own  pursuits  in 
 which  they  desired  to  use  radios.  ID  at    201.  He  also  questioned  the  credibility  of  these 
 witnesses.  He  found  that  both  Jensen  and  Hessman  made  misrepresentations  to  the 
 Office  of  Appeals  of  the  California  Unemployment  Insurance  Appeals  Board  regarding 
 the  circumstances  of  their  discharge  from  Kays  employ.  ID  at    98,  106,  202. 
 Additionally,  the  ALJ  found  that  Cordaro  had  filed  a  sworn  statement  with  the 
 Commission  in  another  proceeding  inconsistent  with  his  testimony  in  this  proceeding  that 
 he  was  not  using  radio  devices  as  part  of  his  independent  business  activities.  ID  at   
 121-  22,  202.  Although  the  ALJ  did  not  question  Pfeifers  veracity,  he  nevertheless 
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 questioned  whether  she  was  a  reliable  witness  because  of  her  vague  and  incomplete 
 recollection.  ID  at    128-  29,  203.  Additionally,  the  ALJ  found  that  Kay  had  not 
 attempted  to  conceal  his  involvement  in  various  applications.  ID  at    204.  He  also  found 
 that  the  Bureau  had  not  shown  that  Kay  was  ineligible  to  apply  for  the  facilities  in 
 question  in  his  own  name.  Thus,  according  to  the  ALJ,  the  Bureau  failed  to  show  that 
 Kay  had  a  motive  to  abuse  the  Commissions  processes.  ID  at    205-  07. 

 68.  The  Bureau  faults  the  ALJ  for  discounting  the  testimony  of  Jensen,  Hessman, 
 Cordaro  and  Pfeifer.  The  Bureau  suggests  that  even  if  there  is  reason  to  question  their 
 credibility  individually,  the  consistency  of  their  testimony  should  be  taken  into  account. 
 Moreover,  the  Bureau  asserts  that  the  circumstances  indicate  that  Jensen,  Hessman,  and 
 Cordaro  really  did  not  require  radio  devices.  The  Bureau  accuses  the  ALJ  of  ignoring 
 evidence  that  Pfeifer  and  Cordaro  were  not  involved  in  the  management  of  stations 
 supposedly  licensed  to  them  and  were  simply  surrogates  for  Kay.  The  Bureau  denies  that 
 it  needed  to  show  a  motive  for  Kays  abuse  of  process. 

 69.  Kay  retorts  that  the  ALJ  had  ample  reason  to  credit  Kays  testimony  over  that 
 of  Jensen,  Hessman,  Cordaro,  and  Pfeifer.  He  denies  that  he  had  a  motive  to  abuse  the 
 Commissions  processes  and  claims  that  he  made  no  attempt  to  conceal  his  involvement 
 in  the  various  applications.  He  characterizes  the  Bureaus  position  as  mere  speculation. 

 70.  This  issue  presents  a  difficult  factual  question.  In  many  respects,  it  boils 
 down  to  a  determination  of  the  relative  credibility  of  Kay  and  his  chief  accusers,  Jensen, 
 Hessman,  and  Cordaro.  Under  these  circumstances,  the  ALJs  findings  concerning  the 
 relative  credibility  of  witnesses  are  generally  entitled  to  great  weight.  See,  e.  g., 
 TeleSTAR,  Inc.,  2  FCC  Rcd  5,  13    23  (Rev.  Bd.  1987),  citing  Penasquitos  Village,  Inc. 
 v.  NLRB,  565  F.  2d  1074,  1078-  80  (9  th  Cir.  1977)  (administrative  law  judges  factual 
 determinations  based  on  testimonial  inferences  are  entitled  to  special  deference).  Here, 
 however,  the  Bureau  correctly  points  to  factors  that  tend  to  undermine  the  ALJs 
 treatment  of  this  issue.  The  fact  that  three  independent  witnesses  testified  consistently 
 concerning  Kay  tends  to  bolster  their  crediblity.  See  Black  Television  Workshop  of  Los 
 Angeles,  Inc.,  8  FCC  Rcd  4192,  4194-  95    19  (1993).  Moreover,  we  are  unable  to 
 discern  the  evidentiary  foundation  for  the  ALJs  conclusion  that  the  undisputed  record 
 establishes  that  Kay  had  a  factual  basis  to  believe  that  Jensen,  Hessman,  and  Cordaro 
 were  engaged  in  or  intended  to  engage  in  pursuits  beyond  the  scope  of  their  employment 
 by  Kay  in  which  they  desired  to  use  Kays  radios  and  repeaters.  ID  at    201  citing 
 Kays  Proposed  Findings  of  Fact  and  Conclusions  of  Law  at    95-  97,  104,  115.  As  the 
 Bureau  aptly  observes,  Jensen,  Hessman,  and  Cordaro  denied  that  they  had  any  need  for 
 the  authorizations  applied  for,  and  there  is  no  independent  evidence  that  they  did.  Tr. 
 1488,  1797,  1844.  Nevertheless,  because  this  issue  depends  critically  on  an  evaluation  of 
 Kays  state  of  mind,  as  to  which  the  ALJs  demeanor  findings  have  considerable  weight, 
 as  well  as  his  conduct,  we  are  reluctant  to  overturn  the  ALJs  assessment  of  Kays 
 testimony  based  solely  on  the  circumstances  set  forth  above.  Moreover,  like  the  ALJ,  we 
 find  that  the  record  does  not  sufficiently  demonstrate  that  Kay  had  a  motive  for  abusing 
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 the  Commissions  processes  in  this  context.  We  note,  however,  that  evidence  under  this 
 issue  concerning  Kays  agreements  with  Pfeifer,  and  Cordaro  reflects  a  pattern  of 
 conduct,  relevant  to  the  de  facto  control  and  misrepresentation  issues,  and  we  will 
 consider  it  in  that  context. 

 VII.  DE  FACTO  CONTROL/  MISREPRESENTATION  ISSUES 
 71.  Judge  Sippel,  the  original  presiding  judge  in  this  proceeding,  added  the 
 following  issues: 

 To  determine,  based  on  the  findings  and  conclusions  of  Initial  Decision  FCC 
 97D-  13  reached  in  WT  Docket  No.  97-  56  concerning  James  A.  Kay,  Jr.  's  (Kay) 
 participation  in  an  unauthorized  transfer  of  control,  whether  Kay  is  basically 
 qualified  to  be  a  Commission  licensee. 

 To  determine  whether  James  A.  Kay,  Jr.  misrepresented  facts  or  lacked  candor  in 
 presenting  a  Motion  To  Enlarge,  Change,  or  Delete  Issues  that  was  filed  by  Kay 
 on  January  12,  1995,  and  January  25,  1995. 

 To  determine  whether  in  light  of  the  evidence  adduced  under  the  aforementioned 
 added  issues  whether  James  A.  Kay,  Jr.  is  qualified  to  hold  a  Commission  license. 

 James  A.  Kay,  Jr.,  FCC  98M-  15  (Feb.  2,  1998). 
 72.  In  WT  Docket  No.  97-  56,  then  Administrative  Law  Judge  John  M.  Frysiak  16 
 concluded  that  Marc  Sobel  was  unqualified  to  be  a  Commission  licensee  because  he  had 
 transferred  control  of  15  SMR  stations  to  Kay  without  authorization.  Marc  Sobel,  12  FCC 
 Rcd  22879  (ALJ  1997).  He  found  that  the  transfer  occurred  pursuant  to  an  arrangement 
 between  Sobel  and  Kay  reflected  in  a  document  called  Radio  System  Management 
 Agreement  and  Marketing  Agreement  (Management  Agreement).  Marc  Sobel,  12  FCC 
 Rcd  at  22899-  900    65-  68.  Pursuant  to  this  arrangement,  Kay  managed  the  stations,  paid 
 the  stations  construction  and  operating  expenses,  and  shared  the  revenues  of  the  stations. 
 Kay  also  had  a  purchase  option  for  the  stations.  The  ALJ  found  based  on  an  analysis  of  the 
 facts  and  circumstances  surrounding  Kays  management  of  the  stations  that  Kay  had 
 ultimate  control  of  the  facilities. 

 73.  Judge  Frysiak,  in  the  Sobel  proceeding,  further  found  that  an  affidavit  executed 
 by  Sobel  in  connection  with  a  Motion  To  Enlarge,  Change,  or  Delete  Issues  that  was  filed 
 by  Kay  in  this  proceeding,  misrepresented  Kay's  relationship  to  the  Management 
 Agreement  stations.  Marc  Sobel,  12  FCC  Rcd  at  22900-  902    69-  78.  Kay  had  filed  the 
 motion  in  this  proceeding  because  the  Commission  had  initially  included  11  licenses  held 
 by  Sobel  in  the  hearing  designation  order  in  this  proceeding  (WT  Docket  No.  94-  147), 

 16  Judge  Frysiak  retired  on  December  31,  1999. 
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 based  on  the  belief  that  Kay  was  doing  business  in  Sobels  name.  James  A.  Kay,  Jr.,  10 
 FCC  Rcd  at  2063    3. 

 74.  The  affidavit  stated: 
 I,  Marc  Sobel,  am  an  individual,  entirely  separate  and  apart 
 in  existence  and  identity  from  James  A.  Kay,  Jr.  Mr.  Kay 
 does  not  do  business  in  my  name  and  I  do  not  do  business  in 
 his  name.  Mr.  Kay  has  no  interest  in  any  radio  station  or 
 license  of  which  I  am  the  licensee.  I  have  no  interest  in  any 
 radio  station  or  license  of  which  Mr.  Kay  is  the  licensee.  I 
 am  not  an  employer  or  employee  of  Mr.  Kay,  am  not  a 
 partner  with  Mr.  Kay  in  any  enterprise,  and  am  not  a 
 shareholder  in  any  corporation  in  which  Mr.  Kay  holds  an 
 interest.  I  am  not  related  to  Mr.  Kay  in  any  way  by  birth  or 
 marriage. 

 12  FCC  Rcd  at  22893-  94    51. 
 75.  Judge  Frysiak  found  that  the  affidavit  and  pleading  did  not  provide  any 
 description  of  the  actual  relationship  between  Sobel  and  Kay,  although  it  was  purportedly 
 prepared  in  part  because  Sobel  believed  that  the  Commission  was  delaying  the  processing 
 of  his  pending  applications  due  to  confusion  about  the  relationship  between  Sobel  and  Kay. 
 12  FCC  Rcd  at  22894-  95    52-  53.  The  ALJ  rejected  as  false  the  statement  in  the  affidavit 
 that  Kay  had  no  "interest"  in  stations  or  licenses  assertedly  held  by  Sobel.  The  ALJ  did  not 
 credit  Sobel's  attempts  to  reconcile  this  statement  with  the  fact  that  Kay  owned  the  stations' 
 equipment,  had  an  option  to  purchase  the  stations,  and  had  a  stake  in  the  stations'  revenues, 
 holding  that  this  arrangement  constituted  "a  fair  amount  of  interest."  12  FCC  Rcd  at  22895-96 
   56-  58,  22901    73.  The  ALJ  concluded  that  the  affidavit  was  intended  to  "ward  off" 
 the  Commission  from  being  apprised  of  the  true  nature  of  the  Kay-  Sobel  business 
 relationship  and  that  it  therefore  lacked  candor.  12  FCC  Rcd  at  22901    73. 

 76.  Judge  Frysiak  further  found  that  Sobel  also  lacked  candor  both  by  failing  to 
 submit  voluntarily  the  Management  Agreement  to  the  Commission  and  in  correspondence 
 with  the  Commission.  12  FCC  at  22897    62,  22901-  02    74.  The  ALJ  therefore  revoked 
 Sobel's  licenses,  denied  his  applications,  and  dismissed  his  finder's  preference  requests. 

 77.  Based  on  the  foregoing,  Judge  Sippel  held  that  the  issue  of  control  in  the  Sobel 
 proceeding  should  not  be  relitigated  in  this  proceeding  and  that  Kay  should  be  permitted 
 to  offer  evidence  only  on  the  issue  of  whether  his  exercise  of  control  over  the  Sobel 
 stations  has  an  impact  on  his  qualifications  to  hold  a  Commission  license.  FCC  98M-  15 
 at    5.  As  to  the  issue  of  misrepresentation,  Judge  Sippel  ruled  that  the  init  ial  decision  in 
 WT  Docket  No.  97-  56  raised  a  substantial  question  of  misrepresentation  or  lack  of  candor 
 and  provided  the  factual  basis  for  adding  an  issue  against  Kay.  Id.  at    6-  11. 
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 78.  In  his  initial  decision  in  this  proceeding,  Chief  Judge  Chachkin  observed  that 
 the  issues  as  framed  did  not  permit  him  to  make  independent  findings  as  to  whether  the 
 Management  Agreement  constituted  an  unauthorized  transfer  of  control.  17  ID  at  n.  48.  In 
 any  event,  however,  the  ALJ  found  that  an  unauthorized  transfer  was  not  disqualifying 
 misconduct  unless  accompanied  by  deception.  ID  at    211.  He  found  that  in  this  case  Kay 
 did  not  intend  to  conceal  the  Management  Agreement,  since  he  voluntarily  gave  a  copy  to 
 the  Bureau  on  March  24,  1995,  after  this  case  was  designated  for  hearing,  in  response  to  a 
 Bureau  discovery  request.  ID  at    165,  213.  He  also  found  that  Kay  and  Sobel  had  been 
 advised  by  counsel  that  the  Management  Agreement  complied  with  FCC  requirements.  ID 
 at    161,  213.  The  ALJ  therefore  found  no  basis  to  impose  sanctions  against  Kay. 

 79.  As  to  the  issue  of  misrepresentations,  Judge  Chachkin  found  that  Judge 
 Frysiaks  initial  decision  in  the  Sobel  proceeding  was  tainted  because  the  Bureau 
 misrepresented  to  Judge  Frysiak  that  Sobel  did  not  disclose  the  Management  Agreement 
 until  his  July  3,  1996  response  to  a  308(  b)  letter  from  the  Bureau,  and  that  the  Bureau 
 concealed  from  Judge  Frysiak  that  Kay  voluntarily  disclosed  the  Management  Agreement 
 to  the  Bureau  during  discovery  in  March  1995.  ID  at    168-  69,  210. 

 80.  Turning  to  the  specific  facts,  the  ALJ  found  that  Kays  allegedly  false 
 statement  with  respect  to  this  matter  occurred  in  the  Motion  to  Enlarge,  Change,  or  Delete 
 Issues  filed  by  Kay  on  January  12  and  25,  1995.  See  Paragraph  73,  supra.  Kays  motion 
 states: 

 James  A.  Kay,  Jr.  is  an  individual.  Marc  Sobel  is  a  different  individual.  Kay  does 
 not  do  business  in  the  name  of  Marc  Sobel  or  use  Sobels  name  in  any  way.  As 
 shown  by  the  affidavit  of  Marc  Sobel  attached  as  Exhibit  II,  hereto,  Kay  has  no 
 interest  in  any  of  the  licenses  or  stations  held  by  Marc  Sobel.  Marc  Sobel  has  no 
 interest  in  any  of  the  licenses  or  stations  authorized  to  Kay  or  any  business  entity  in 
 which  Kay  holds  an  interest.  Because  Kay  has  no  interest  in  any  license  or  station 
 in  common  with  Marc  Sobel  and  because  Sobel  was  not  named  as  a  party  to  the 
 instant  proceeding,  the  presiding  officer  should  either  change  the  HDO  to  delete  the 
 reference  to  the  stations  [licensed  to  Sobel]  or  should  dismiss  the  HDO  with  respect 
 to  those  stations. 

 ID  at    170;  WTB  Exh  343  at  3-  4. 

 17  Despite  this  acknowledgment,  Judge  Chachkin  made  35  paragraphs  of  findings  (ID  at    143-  74)  that 
 largely  overlap  Judge  Frysiakss  findings  in  the  Sobel  proceeding,  and  also  questioned  the  legal  standard 
 applied  by  Judge  Frysiak  (ID  at  n.  48).  Because  Kay  was  a  party  to  the  Sobel  proceeding  and  had  a  full 
 opportunity  to  litigate  the  transfer  of  control  issue  there,  we  have  not  set  forth  Chief  Judge  Chachkins 
 duplicative  findings  at  length.  In  our  review  of  the  Sobel  proceeding,  discussed  at  paragraph  85,  infra,  we 
 address  the  question  of  the  relevant  legal  standard. 
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 26 
 81.  The  ALJ  found  that  Kay  understood  that  his  lawyers  meant  that  Kay  had  no 
 interest  in  the  sense  that  Kay  had  no  legal  or  ownership  interest  in  the  licenses,  such  as 
 by  being  a  partner.  Kay  testified  that  he  and  his  then  attorney,  Brown,  used  the  terms 
 license  and  station  interchangeably.  ID  at    171.  The  ALJ  also  found  that  the  motion 
 was  not  primarily  intended  to  address  the  Management  Agreement,  since  only  two  of  the 
 11  stations  sought  to  be  deleted  were  Management  Agreement  stations.  Moreover,  Kays 
 lawyer  specifically  advised  him  that  the  Management  Agreement  did  not  constitute  an 
 interest.  ID  at    172.  The  ALJ  found  that  Kay  and  Sobel  testified  in  a  candid  and 
 forthright  manner.  ID  at    173.  Additionally,  he  found  that  Kay  had  disclosed  the 
 Management  Agreement  in  March  1995  during  discovery.  ID  at    174.  The  ALJ  observed 
 that  the  Bureau  did  not  seek  the  addition  of  a  misrepresentation  issue  against  Sobel  until 
 April  1997.  ID  at    174,  n.  31. 

 82.  The  ALJ  concluded  that  Kay  had  not  attempted  to  deceive  the  Commission. 
 The  ALJ  found  that  Kay  believed  that  the  statement  concerning  interest  was  accurate  and 
 did  not  attempt  to  conceal  the  Management  Agreement.  In  the  absence  of  deceptive  intent, 
 the  ALJ  resolved  the  misrepresentation  issue  in  Kays  favor.  ID  at    214-  18. 

 83.  The  Bureau  observes  that  the  ALJs  treatment  of  this  issue  is  inconsistent  with 
 Judge  Frysiaks  analysis  in  the  Sobel  proceeding.  The  Bureau  claims  that  Judge  Frysiak 
 was  aware  of  the  disclosure  of  the  Management  Agreement  in  March  1995,  but  considered 
 the  disclosure  outside  the  relevant  time  period  (since  the  Management  Agreement  was  not 
 disclosed  until  two  months  after  Sobels  affidavit  was  submitted  in  January  1995).  The 
 Bureau  contends  that  the  statement  that  Kay  had  no  interest  in  Sobels  stations  is  plainly 
 false  in  light  of  the  financial  claims  he  had  under  the  Management  Agreement  and  that 
 Kays  attempts  to  reconcile  the  statement  are  unpersuasive.  The  Bureau  asserts  that  Kay 
 had  no  basis  for  his  claimed  reliance  on  counsel  and  that  he  deceitfully  intended  to  conceal 
 his  relationship  with  Sobel  from  the  Commission. 

 84.  Kay  maintains  that  the  motion  reflects  no  intent  to  deceive.  According  to  Kay, 
 the  motion  merely  intended  to  show  that,  contrary  to  the  representation  in  the  hearing 
 designation  order,  Kay  did  not  conduct  business  in  Sobels  name.  Kay  observes  that  only 
 two  of  the  11  stations  listed  in  the  hearing  designation  order  were  Management  Agreement 
 stations.  He  asserts  that  arguments  over  the  meaning  of  the  words  interest  and  the  like 
 are  merely  quibbles.  Kay  observes  that  he  disclosed  the  Management  Agreement  during 
 discovery  and  suggests  that  he  would  not  even  have  put  it  in  writing  if  he  intended  to 
 deceive  the  Commission.  He  also  argues  that  he  legitimately  relied  on  advice  of  counsel. 
 Kay  maintains  that  the  Bureau  has  been  disingenuous  about  his  disclosure  of  the 
 Management  Agreement  in  March  1995. 

 85.  In  a  companion  decision  to  this  one,  we  have  today  ruled  on  exceptions  filed  by 
 Sobel  and  Kay  to  the  init  ial  decision  in  WT  Docket  No.  97-  56.  Marc  Sobel,  FCC  01-  342 
 (adopted  Nov.  20,  2001)  (Decision).  Because  Kay  is  a  party  in  WT  Docket  No.  97-  56,  he 
 is  bound  by  the  determinations  made  in  that  proceeding  to  the  extent  that  they  involve 
26
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 findings  and  conclusions  common  to  the  two  proceedings.  See  Westel  Samoa,  Inc.,  13 
 FCC  Rcd  6342,  6346    13  (1998)  (doctrine  of  collateral  estoppel).  In  the  Sobel  decision, 
 we  affirmed  the  ALJs  determination  that  under  the  Management  Agreement,  Sobel 
 transferred  de  facto  control  of  his  facilities  to  Kay  without  Commission  authorization.  We 
 noted  that  some  ambiguity  existed  as  to  the  applicable  standard  for  determining  control  in 
 this  context  and  found  that  the  same  result  obtained  under  the  holdings  of  both 
 Intermountain  Microwave,  24  RR  98  (1963)  (which  we  intend  to  apply  in  the  future)  and 
 Motorola,  Inc.,  File  Nos.  50705  (PRB  1985)  (unpublished).  Decision  at    52-  59. 

 86.  We  further  found  that  Sobels  January  24,  1995  affidavit  lacked  candor.  In  this 
 regard,  we  were  not  swayed  by  Chief  Judge  Chachkins  finding  in  this  proceeding  that 
 Kay  and  Sobel  testified  in  this  proceeding  and  answered  questions  put  to  them  in  a 
 candid  and  forthright  manner.  Their  testimony  that  they  did  not  intend  to  deceive  the 
 Commission  concerning  their  business  dealings  is  entirely  candid  and  is  accepted.  ID  at 
   173.  These  findings  are  not  entitled  to  deference  (see  paragraph  70,  supra)  in  view  of 
 the  fact  that  Judge  Frysiak,  who  heard  essentially  the  same  testimony  in  the  Sobel 
 proceeding,  clearly  did  not  find  these  witnesses  credible.  We  believe  that  the  existence  of 
 these  conflicting  findings  bears  on  whether  such  findings  are  supported  by  substantial 
 evidence.  See,  e.  g.,  Bauzo  v.  Bown,  803  F.  2d  917,  922  (7  th  Cir.  1986).  In  view  of  the 
 apparent  conflict  between  the  two  judges  assessment  of  the  witnesses  credibility,  we  did 
 not  defer  to  either  ALJ  but  based  our  decision  on  our  own  independent  assessment  of  the 
 nature  of  the  representations  made  and  the  circumstances  that  were  involved.  18 

 87.  In  this  regard,  we  do  not  accept  Kays  suggestion  that  Judge  Frysiaks 
 evaluation  of  the  witnesses  credibility  should  be  accorded  less  weight  than  Chief  Judge 
 Chachkins  because  the  formers  initial  decision  was  tainted.  Kay  bases  this  contention 
 on  Chief  Judge  Chachkins  finding  that: 

 Judge  Frysiak's  decision  was  tainted  because  the  Bureau  deliberately 
 concealed  the  fact  that  Kay  had  given  a  copy  of  the  Management 
 Agreement  to  the  Bureau  on  March  24,  1995.  Thus,  in  reaching  his 
 conclusion,  the  Judge  was  unaware  of  the  March  24,  1995  filing  and 
 erroneously  assumed  that  the  Commission  first  received  a  copy  of  the 
 Management  Agreement  on  July  3,  1996. 

 18  The  dissent  suggests  that  a  new  hearing  should  be  held  to  allow  a  new  ALJ  to  make  credibility  findings. 
 We  believe  that  no  further  hearing  is  necessary  given  the  Commission's  power  of  de  novo  review.  See  FCC 
 v.  Allentown  Broadcasting  Corp.,  349  U.  S.  358,  364-  65  (1955);  Parker  v.  Bowen,  788  F.  2d  1512,  1520 
 (11th  Cir.  1986);  Moore  v.  Ross,  687  F.  2d  604,  608-  09  (2d  Cir.  1982)  (agency  has  the  power  to  make 
 findings  of  fact  in  the  first  instance  and  is  not  bound  by  the  credibility  determinations  of  an  ALJ). 
 Moreover,  additional  hearings  would  be  wasteful  and  time  consuming.  No  matter  how  the  new  ALJ  ruled, 
 there  would  still  be  conflicting  credibility  determinations  that  the  Commission  would  have  to  resolve.  We 
 don't,  for  example,  see  a  justification  for  adopting  an  automatic  "majority  rules"  policy.  We  therefore 
 choose  to  exercise  our  power  of  de  novo  review. 
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 ID  at    169.  See  also  ID  at    210.  Chief  Judge  Chachkin  also  listed  several  pleadings 
 and  orders,  which  he  found,  demonstrated  the  Bureaus  elaborate  scheme  to  conceal  the 
 March  24,  1995  submission  from  Judge  Frysiak.  ID  at    169. 

 88.  Our  examination  of  the  record,  however,  provides  no  support  for  the  assertion 
 that  Judge  Frysiaks  decision  was  tainted  or  that  the  Bureau  engaged  in  an  elaborate 
 scheme.  Initially,  we  find  no  reason  to  believe  that  Judge  Frysiak  would  have  changed 
 his  view  of  Sobels  state  of  mind  based  on  the  March  1995  submission.  He  had  already 
 ruled  that  the  relevant  timeframe  for  determining  Sobels  state  of  mind  was  when  Sobel 
 executed  his  affidavit  in  January  1995,  not  afterwards.  Tr.  WT  Docket  No.  97-  56  at  297-99. 
 The  mere  fact  that  the  Management  Agreement  was  produced  in  discovery  in  March 
 1995  thus  would  not  have  had  material  impact  on  Judge  Frysiaks  analysis. 

 89.  The  record  also  undercuts  the  suggestion  that  the  Bureau  engaged  in  an 
 elaborate  scheme  to  conceal  the  March  1995  submission  from  Judge  Frysiak,  inasmuch 
 as  Sobel  himself  could  readily  inform  Judge  Frysiak  of  the  submission  and  did  so 
 explicitly  at  least  twice  during  the  proceeding.  During  discovery,  Sobel  sought  the 
 Bureaus  admission  that:  A  copy  of  the  Radio  System  Management  and  Marketing 
 Agreement  .  .  .  has  been  in  the  possession  of  the  Bureau  since  24  March  1995.  Sobels 
 Request  for  Admission  of  Facts  and  Genuineness  of  Documents  by  the  Bureau,  filed 
 March  19,  1997  at  3    7.  Judge  Frysiak  denied  Sobels  requested  admission  as  irrelevant, 
 based  on  the  timing  of  the  disclosure.  (see  paragraph  88,  supra).  See  Marc  Sobel,  FCC 
 97M-  57  (Apr.  17,  1997).  19  Later,  the  Bureau  sought  the  addition  of  the 
 misrepresentation/  lack  of  candor  issue  now  under  discussion.  (The  hearing  designation 
 order  in  the  Sobel  proceeding  specified  only  the  transfer  of  control  issue.)  Sobel  argued 
 in  opposition  that  he  could  not  have  intended  to  deceive  the  Commission  because  he:  .  .  . 
 was  aware  that  Kay  intended  to  produce  a  copy  of  the  agreement  in  response  to  Bureau 
 discovery  requests  and  assumed  that  this  had  already  been  done.  Opposition  to  the 
 Bureaus  Motion  to  Enlarge  Issues,  filed  April  21,  1997  at  5  n.  8.  Apparently  referring  to 
 his  earlier  request  for  admission,  Sobel  further  stated: 

 Sobel  has  attempted  in  discovery  in  this  proceeding  to  determine  precisely  when 
 the  Bureau  became  aware  of  and  received  a  copy  of  the  agreement,  but  the  Bureau 
 has  thus  far  refused  to  provide  such  information. 

 Id.  As  the  request  for  admission  filed  a  month  earlier  indicated,  however,  Sobel  already 
 knew  the  precise  date;  the  Bureau  did  not  conceal  it. 

 19  The  dissent  suggests  that  it  is  not  possible  to  assess  after  the  fact  the  potential  impact  of  the  March  1995 
 disclosure  on  Judge  Frysiaks  decision.  We  see  no  reason,  however,  to  disregard  Judge  Frysiaks  own 
 rulings  discounting  the  significance  of  subsequent  disclosure  of  the  Management  Agreement.  Moreover, 
 the  ultimate  question,  of  course,  is  not  whether  Judge  Frysiak  would  have  reached  a  different  decision,  but 
 whether  the  record,  on  review,  warrants  a  different  decision.  In  this  regard,  as  indicated  below,  our 
 evaluation  of  the  record  as  a  whole  is  consistent  with  Judge  Frysiaks  assessment  that  Kay  and  Sobel  made 
 intentional  deceptive  representations  about  their  relationship,  notwithstanding  the  March  1995  disclosure. 
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 29 
 90.  At  the  hearing  Sobel  had  the  opportunity  to  testify  as  to  this  point. 
 Sobel  testified  that  at  the  time  he  signed  the  affidavit  he  expected  that  the  Bureau  would 
 obtain  a  copy  of  the  Management  Agreement  or  become  aware  of  it,  if  they  had  not 
 already  done  so.  Tr.  WT  Docket  No.  97-  56  at  302.  Judge  Frysiak  then  asked  Sobel 
 whether  he  filed  the  Management  Agreement  with  the  Commission.  Sobel  answered  that 
 Kay  filed  it  along  with  the  January  1995  motion.  Tr.  WT  Docket  No.  97-  56  at  303. 
 Sobels  attorney  (who  represents  Kay  in  this  proceeding)  stipulated  that  Sobel  was 
 incorrect  in  this  assertion,  without  mentioning  the  March  1995  submission.  Id.  Later, 
 Bureau  counsel  specifically  asked  Sobel:  when  was  the  first  time  you  provided  a  copy  of 
 [the]  management  agreement  to  the  Commission.  Tr.  WT  Docket  No.  97-  56  at  313. 
 Sobel  responded:  In  reference  to  the  Commissions  request  for  information  under 
 308(  b).  Id.  Sobels  attorney  (Kays  here)  stipulated  that  the  date  was  July  3,  1996, 
 again  without  mentioning  the  March  1995  submission.  Tr.  WT  Docket  No.  97-  56  at  314. 

 91.  Judge  Frysiaks  finding  that:  .  .  .  Sobel  did  not  submit  the  Management 
 Agreement  to  the  Commission  until  July  3,  1996  .  .  .  .    (12  FCC  Rcd  at  22897    62)  was 
 based  on  and  consistent  with  the  above-  cited  evidence.  It  does  appear  that  neither  the 
 Bureau  20  nor  Judge  Frysiak  addressed  Sobels  contention  in  a  footnote  to  his  reply 
 findings  and  conclusions,  that: 

 The  Presiding  ALJ  may  take  official  notice  that  a  copy  of  the  written  agreement 
 was  produced  to  the  Commission  on  24  March  1995,  as  an  attachment  to  Kays 
 Responses  to  Wireless  Telecommunications  Bureaus  First  Request  for 
 Documents  in  WT  Docket  No.  94-  147,  the  Kay  license  revocation  proceeding. 

 Reply  to  the  Wireless  Telecommunications  Bureaus  Proposed  Findings  of  Fact  and 
 Conclusions  of  Law,  filed  October  27,  1997  at  9  n.  5.  21  The  record  does  not  disclose  why 
 the  Bureau  and  Judge  Frysiak  did  not  address  this  footnote.  As  explained  in  paragraph 
 88,  supra,  however,  we  have  no  basis  to  find  that  this  omission  had  a  material  impact  on 
 Judge  Frysiaks  initial  decision.  Moreover,  the  Bureau  could  hardly  have  concealed 
 the  footnote,  especially  since  the  Bureau  discussed  and  cited  the  paragraph  containing  the 
 footnote  in  its  reply.  Wireless  Telecommunications  Bureaus  Comments  on  Replies  to 
 Proposed  Findings  of  Fact  and  Conclusions  of  Law,  filed  October  31,  1997  at  5-  6    9. 

 20  The  Bureau  stated  in  its  reply  to  the  relevant  pleading  that:  None  of  Sobels  or  Kays  filings  in  1994  or 
 1995  disclosed  the  relationship  between  Sobel  and  Kay  with  respect  to  the  Management  Agreement 
 stations.  Wireless  Telecommunications  Bureaus  Comments  on  Replies  to  Proposed  Findings  of  Fact  and 
 Conclusions  of  Law,  filed  October  31,  1997  at  3    4.  The  record  does  not  disclose  whether  the  Bureau 
 believed  that  the  production  of  the  Management  Agreement  in  discovery  on  March  24,  1995  was  not  a 
 filing,  or  whether  the  Bureau  inadvertently  overlooked  the  March  24,  1995  submission  in  making  this 
 statement.  21 
 The  associated  text  in  the  body  of  the  pleading  states:  By  this  time  [when  the  Commission  modified  the 
 hearing  designation  order  to  delete  Sobels  stations],  the  Bureau  had  been  provided,  in  discovery,  with  a 
 copy  of  the  written  agreement  between  Sobel  and  Kay. 
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 30 
 92.  In  our  decision,  we  found  that  Sobels  affidavit  went  beyond  denying  that 
 Sobel  was  Kays  alter  ego  and  made  several  factual  assertions  that  were  misleading.  Most 
 notably,  we  found  that  the  claim  that  Kay  had  no  interest  in  Sobels  stations  was  false  in 
 light  of  the  substantial  financial  interests  he  had  under  the  Management  Agreement. 
 Decision  at    71.  We  also  found  that  several  other  statements,  while  perhaps  technically 
 correct,  tended  to  be  misleading,  such  as  that  Sobel  was  not  an  employee  or  partner  of 
 Kay.  Id.  at    73.  We  found  that,  in  light  of  the  facts  as  fully  disclosed,  the  affidavit,  and 
 the  pleading  it  supported,  left  the  false  impression  that  .  .  .  Kay  has  no  interest  in  any 
 license  or  station  in  common  with  Marc  Sobel  .  .  .  .    Id.  at    74. 

 93.  We  found  that  Sobel  appreciated  the  questionable  nature  of  the  claim  that  Kay 
 had  no  interest  in  his  stations,  since  Kay  had  told  him  that  the  word  connoted  a  direct 
 financial  stake.  Decision  at    72.  Additionally,  we  found  that  Sobel  and  Kay  understood 
 that  the  Commission  would  want  to  know  the  true  relationship  between  them.  Id.  at    74-75. 
 Because  Sobel  could  appreciate  the  nature  of  the  representation,  we  rejected  his 
 attempt  to  rely  on  advice  of  counsel.  Id.  at    77. 

 94.  In  determining  the  sanction  to  be  imposed  against  Sobel,  we  found  that  an 
 unauthorized  transfer  of  control  accompanied  by  deception  constituted  disqualifying 
 misconduct.  Decision  at    80.  We  took  into  account,  however,  that  the  Management 
 Agreement  and  the  misleading  affidavit  concerned  only  some  of  Sobels  facilities  and  that 
 he  had  operated  most  of  his  facilities  for  over  twenty  years  without  any  record  of 
 misconduct.  Id.  at    80.  We  therefore  revoked  or  denied  only  those  facilities  on  the  800 
 MHz  band,  the  band  on  which  the  Management  Agreement  Stations  operated. 

 95.  We  find  that  our  conclusions  regarding  Sobel  reflect  adversely  on  Kay.  The 
 representations  that  we  found  false  and  misleading  were  made  in  a  pleading  filed  by  Kay. 
 For  the  reasons  discussed  in  the  Sobel  decision  (Decision  at    74),  we  reject  Kays 
 argument  that  the  case  against  him  represents  mere  quibbles  over  the  meaning  of  the 
 words  used.  We  do  not  believe  that  a  reasonable  reader  could  square  the  language  used 
 with  the  facts  as  fully  disclosed.  Moreover,  Kay,  like  Sobel,  understood  the  questionable 
 nature  of  the  claim  that  he  had  no  interest  in  Sobels  stations  and  knew  that  the 
 Commission  would  want  to  know  the  true  relationship  between  Sobel  and  Kay. 
 Accordingly,  Kay  too  has  no  basis  to  rely  on  advice  of  counsel  as  a  defense. 

 96.  We  also  reject  Kays  argument  that  his  disclosure  of  the  Management 
 Agreement  during  discovery  negates  any  possible  intent  to  deceive.  While  Kay 
 subsequently  disclosed  the  Management  Agreement  after  specifically  being  requested  by 
 the  Bureau  during  discovery  to  produce  all  management  documents,  he  did  not  disclose  the 
 Management  Agreement  in  connection  with  the  pleading  at  issue  here  (submitted  two 
 months  earlier),  although  it  would  have  served  to  clarify  his  relationship  with  Sobel.  See 
 Wireless  Telecommunications  Bureaus  First  Request  for  Documents,  filed  February  17, 
 1995,  at  6-  7    12  (requesting  all  management  documents). 
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 31 
 97.  Moreover,  a  finding  that  Kay  deliberately  intended  to  conceal  his  relationship 
 with  Sobel  is  consistent  with  other  instances  in  the  record  indicating  that  Kay  was  not 
 forthcoming  about  stations  he  managed.  For  example,  beginning  in  the  early  1990s,  Kay 
 managed  stations  that  were  licensed  to  Pfeifer,  Cordaro,  and  Sobel.  ID  at    108-  09,  123- 
 24,  126.  In  Pfeifers  case,  the  ALJ  found  that  in  1987,  Kay  assisted  Pfeifer  in  obtaining  a 
 license  pursuant  to  an  arrangement  whereby  Kay  was  to  construct  the  station  and  market 
 service  when  it  was  filled  with  users.  ID  at    126.  The  ALJ  did  not  question  Pfeifers 
 testimony  22  that,  to  document  to  the  Commission  that  the  station  had  been  constructed,  Kay 
 prepared  an  invoice  (WTB  Exh.  301)  and  had  Pfeifer  issue  a  check  (WTB  Exh.  302)  for 
 $1,  511.  87,  but  had  then  reimbursed  Pfeifer  for  the  amount  of  the  check.  Tr.  1556-  57.  The 
 purported  payment  was  thus  not  a  real  payment  but  was  designed  merely  to  generate 
 documentation  for  the  Commission.  Although  Pfeifer  and  Kay  entered  into  a  lease 
 agreement  calling  for  Pfeifer  to  pay  Kay  $600  a  month  rent  for  the  transmitter  site  (WTB 
 Exh.  300),  Pfeifer  testified  that  Kay  did  not  actually  expect  any  payment.  Tr.  1544-  45. 
 Pfeifer  testified  that  Kay  told  her  he  needed  to  have  [the  lease]  to  comply  with  FCC 
 regulations.  Tr.  1544. 

 98.  Similarly,  the  record  in  the  Sobel  proceeding  showed  that  Kay  prepared 
 responses  to  application  return  notices  (which  are  sent  to  indicate  problems  with  land 
 mobile  applications)  on  Sobel's  behalf.  On  customer  invoices  attached  to  the  responses, 
 Kay  blacked  out  the  name  of  his  business,  "Lucky's  Two-  Way  Radios."  Marc  Sobel,  12 
 FCC  Rcd  at  22898-  99    64,  22902    76.  23 

 99.  Finally,  Kays  June  2,  1994,  response  to  the  Bureaus  308(  b)  Letter  contained 
 the  following  language:  Mr.  Kay  states  that  he  does  not  operate  any  station  of  which  either 
 he  or  [Buddy  Corp.  or  Oat  Trunking  Group,  Inc.]  is  not  the  licensee.  WTB  Exh.  11  at  1. 
 Kay  was  in  fact  operating  Sobels  stations  under  an  oral  agreement  at  the  time.  Marc  Sobel, 
 12  FCC  Rcd  at  22883    12.  We  believe  the  aforementioned  matters  are  relevant  to  the 
 designated  issues  because  they  confirm  the  existence  of  a  pattern  of  conduct.  See  Ismail  v. 
 Cohen,  706  F.  Supp.  243,  252-  53  (S.  D.  N.  Y.  1989);  Fed.  R.  Evid.  404(  b).  24 

 VIII.  SANCTIONS 
 100.  The  record  in  this  proceeding  indicates  that  Kay  has  violated  his  obligations 
 as  a  licensee.  Under  the  308(  b)  issue  we  found  that  Kay  deliberately  withheld  material 
 information  from  the  Commission  without  justification  in  violation  of  47  C.  F.  R.    1.17.  As 
 discussed  previously,  Kays  inadequate  responses  do  not  warrant  disqualification.  The 

 22  The  ALJ  did  not  question  Pfeifers  credibility,  although  he  did  question  her  reliability  as  to  some 
 matters.  ID  at    203.  23 
 We  found  that  this  matter  was  irrelevant  with  respect  to  Sobel  because  Kay,  not  Sobel,  had  blacked  out 
 the  information.  Decision  at  n.  6.  We  believe  it  is  relevant  here  as  demonstrating  a  pattern  of  conduct.  We 
 therefore  reverse  Judge  Chachkins  rejection  of  WTB  Exhs.  332-  33  based  on  his  determination  that  this 
 matter  was  irrelevant  to  the  alleged  misconduct  here.  See  Tr.  783-  90.  24 
 In  view  of  this  pattern  of  conduct,  we  do  not  believe  that  it  is  necessary  to  reach  the  question  of  whether 
 this  representation  by  itself  constitutes  disqualifying  misconduct. 
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 hearing  designation  order,  however,  also  served  as  a  notice  of  apparent  liability  for 
 forfeiture.  James  A.  Kay,  Jr.,  10  FCC  Rcd  2062    16  (1994).  See  Abacus  Broadcasting 
 Corp.,  8  FCC  Rcd  5110,  5114-  15    16-  18  (Rev.  Bd.  1993)  (appropriateness  of  forfeiture 
 for  violation  of  47  C.  F.  R.    1.  17  absent  a  finding  of  deception).  We  believe  that,  under  the 
 Commissions  forfeiture  standards,  the  category  most  relevant  to  Kays  misconduct  is 
 Failure  to  respond  to  Commission  communications,  for  which  the  base  forfeiture  amount 
 is  $4,  000  per  instance.  47  C.  F.  R.    1.80(  b)(  4)  Note.  Because  Kays  nonresponsiveness 
 was  of  a  continuous  nature,  we  adjust  the  forfeiture  upwards  to  $10,000.  Id. 

 101.  The  record  also  shows  that  Kays  Motion  to  Enlarge,  Change,  or  Delete  Issues 
 filed  by  Kay  on  January  12  and  25,  1995  lacked  candor.  Although  lack  of  candor  may 
 warrant  revocation  of  all  licenses,  we  believe  that  it  is  appropriate  to  limit  the  sanction 
 imposed  here.  In  particular,  we  note  that  deterrence  is  an  important  element  of  the 
 character  qualifications  process.  See  Character  Qualifications,  102  FCC  2d  1179,  1128   
 103  (1986).  The  misconduct  found  here,  concerning  Sobels  stations,  involves  only 
 stations  operating  on  the  800  MHz  band.  We  find  that  the  revocation  of  Kays  licenses  for 
 stations  operating  on  this  band  will  serve  as  a  significant  deterrent  to  future  misconduct. 
 Moreover,  because  we  found  that  the  control  of  Sobels  Management  Agreement  stations 
 had  been  transferred  to  Kay  and  that  Kay  shared  in  the  value  of  these  stations,  the 
 revocation  of  these  stations  also  serves  to  deter  future  misconduct  by  Kay  as  well  as  by 
 Sobel.  We  will  therefore  limit  the  sanction  applicable  to  Kay  to  revocation  of  the  25 
 licenses  for  his  stations  operating  on  the  800  MHz  band. 

 IX.  ORDERING  CLAUSES 
 102.  ACCORDINGLY,  IT  IS  ORDERED,  That,  good  cause  for  filing  an 
 additional  pleading  concerning  his  November  2,  1999  Motion  to  Strike  not  having  been 
 shown,  the  Request  for  Leave  to  File  Reply,  filed  November  5,  1999,  by  James  A.  Kay,  Jr., 
 IS  DENIED,  and,  for  the  reasons  set  forth  in  paragraph  12,  supra,  the  Motion  to  Strike, 
 filed  November  2,  1999,  by  James  A.  Kay,  Jr.  IS  DENIED. 

 103.  IT  IS  FURTHER  ORDERED,  That,  for  the  reasons  set  forth  in  note  13,  supra, 
 the  Motion  for  Leave  to  File  Supplement  to  Reply  Exceptions,  filed  December  30,  1999, 
 and  the  Motion  for  Leave  to  File  a  Reply  to  the  Bureaus  Opposition  to  the  December  30, 
 1999  Filing  ,  filed  January  20,  2000,  by  James  A.  Kay,  Jr.  ARE  DISMISSED  as  moot. 

 104.  IT  IS  FURTHER  ORDERED,  That,  because  oral  argument  would  not 
 materially  assist  the  Commission,  the  Request  for  Oral  Argument,  filed  November  2,  1999, 
 by  James  A.  Kay,  Jr.  IS  DENIED. 

 105.  IT  IS  FURTHER  ORDERED,  That  the  Wireless  Telecommunications 
 Bureaus  Exceptions  and  Brief,  filed  October  12,  1999,  IS  GRANTED  in  part  and  IS 
 DENIED  in  part. 
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 106.  IT  IS  FURTHER  ORDERED,  That  the  Initial  Decision  of  Chief 
 Administrative  Law  Judge  Joseph  Chachkin,  FCC  99D-  04  (ALJ  Sept.  10,  1999)  IS 
 MODIFIED  to  the  extent  indicated  above. 

 107.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  Section  1.80(  h)  of  the  Rules,  47 
 C.  F.  R.    1.  80(  h),  James  A.  Kay,  Jr.  shall,  within  thirty  (30)  days  of  the  release  of  this 
 Decision,  pay  the  amount  of  $10,000  for  the  violations  described  above.  25  Payment  of 
 the  forfeiture  shall  be  made  by  check  or  money  order  drawn  on  a  U.  S.  financial 
 institution  payable  to  the  Federal  Communications  Commission.  Payment  may  also  be 
 made  by  credit  card  with  the  appropriate  documentation.  26  The  remittance  should  be 
 marked  "NAL/  Acct.  No.  915KC0002"  and  mailed  to  the  following  address: 

 Federal  Communications  Commission 
 P.  O.  Box  73482 
 Chicago,  Illinois  60673-  7482 

 Forfeiture  penalties  not  paid  within  thirty  (30)  days  will  be  referred  to  the  U.  S.  Attorney 
 for  recovery  in  a  civil  suit.  47  U.  S.  C.    504(  a). 

 108.  IT  IS  FURTHER  ORDERED,  That  the  following  licenses  of  James  A.  Kay, 
 Jr.,  ARE  REVOKED:  WNIZ676,  WNMT755,  WNVL794,  WNVW779,  WNWB268, 
 WNWB332,  WNWK982,  WNWN703,  WNWQ651,  WNXB280,  WNXQ372, 
 WNXQ353,  WNXQ911,  WNXS450,  WNXS753,  WNXW280,  WNXW549,  WNYQ437, 
 WNYR747,  WNZY505,  WNZZ731,  WPAP683,  WPAZ639,  WPBW517,  WNXW487. 

 109.  IT  IS  FURTHER  ORDERED,  That  the  licensee  IS  AUTHORIZED  to 
 continue  operation  of  the  stations  mentioned  in  paragraph  108  until  12:  01  A.  M.  on  the 
 ninety-  first  day  following  the  release  date  of  this  decision  to  enable  the  licensee  to  conclude 
 the  stations'  affairs;  PROVIDED,  HOWEVER,  that  if  the  licensee  seeks  reconsideration  or 
 judicial  review  of  our  action  revoking  its  license,  it  is  authorized  to  operate  the  stations 
 until  final  disposition  of  all  administrative  and/  or  judicial  appeals. 

 110.  IT  IS  FURTHER  ORDERED  that  a  copy  of  this  order  shall  be  sent  by 
 certified  mail,  return  receipt  requested,  to  James  A.  Kay,  Jr.,  P.  O.  Box  7890,  Van  Nuys, 
 California  91409-  7890. 

 25  Claims  of  inability  to  pay  should  be  supported  by  tax  returns  or  other  financial  statements  prepared  under 
 generally  accepted  accounting  principles  for  the  most  recent  three  year  period.  26 
 Requests  for  installment  plans  should  be  mailed:  Chief,  Credit  &  Debt  Management  Center,  Mail  Stop 
 1110A2,  445  Twelfth  Street,  S.  W.,  Washington,  D.  C.  20554.  Payment  for  the  forfeiture  in  installments  may 
 be  considered  as  a  separate  matter  in  accordance  with  Section  1.  1914  of  the  Rules,  47  C.  F.  R.    1.1914. 
 Please  contact  Chief,  Credit  &  Debt  Management  Center  for  information  regarding  credit  card  payments. 
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 111.  IT  IS  FURTHER  ORDERED,  That  this  proceeding  IS  TERMINATED. 
 FEDERAL  COMMUNICATIONS  COMMISSION 
 Magalie  Roman  Salas 
 Secretary 
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 CONSOLIDATED  SEPARATE  STATEMENT  OF  COMMISSIONER  KEVIN  J  .  MARTIN, 
 CONCURRING  IN  PART  AND  DISSENTING  IN  PART 
 Re:  James  A.  Kay,  Jr.,  Licensee  of  One  Hundred  Fifty  Two  Part  90  Licenses  in  the 
 Los  Angeles,  California  Area,  Decision,  WT  Docket  No.  94-  147; 
 Marc  Sobel  and  Marc  Sobel  d/  b/  a  Air  Wave  Communications,  Licensee  of  Certain 
 Part  90  Stations  in  the  Los  Angeles  Area,  Decision,  WT  Docket  No.  97-  56 

 I  dissent  in  large  part  from  this  item.  I  am  unwilling  to  approve,  based  on  the 
 conflicting  and  confusing  record  before  us,  the  determination  that  James  A.  Kay,  Jr. 
 improperly  failed  to  respond  to  requests  for  information  and  that  Kay  and  Marc  Sobel 
 lacked  candor  in  filings  they  made  to  the  Commission.  In  the  information  request 
 decision,  the  Commission  reverses  an  ALJs  explicit  findings  that  Kay  acted  reasonably 
 in  the  face  of  a  demanding  inquiry  by  the  Bureau    findings  that  are  ordinarily  accorded 
 great  deference.  In  the  lack  of  candor  decision,  upon  which  two  ALJs  reached  opposite 
 conclusions,  the  Commission  essentially  sides  with  the  first  ALJ,  even  though  he  did  not 
 have  accurate  information  on  all  of  the  relevant  facts.  In  my  view,  the  Commission  does 
 itself  a  disservice  by  making  these  decisions  on  the  cold  record  before  it.  At  the  very 
 least,  the  Commission  should  have  referred  this  proceeding  to  a  new  ALJ  to  reconcile  the 
 conflicting  decisions  and  make  definitive  findings. 

 I.  Failure  To  Respond  to  Commission  Inquiries 
 This  case  began  as  an  investigation  into  whether  Kay  was  falsely  reporting  the 
 number  of  mobile  units  he  served  in  order  to  avoid  certain  channel  sharing  and  recovery 
 rules.  Having  received  several  complaints  making  such  allegations,  the  Wireless  Bureau 
 served  Kay  with  a  request  for  information.  A  lengthy  exchange  ensued,  in  which  Kay 
 and  the  Bureau  wrestled  over  what  information  Kay  would  provide  and  when  he  would 
 provide  it.  Kays  actions  during  the  course  of  this  exchange  are  the  basis  for  the 
 Commissions  determination  that  Kay  improperly  failed  to  respond  to  the  Bureaus 
 inquiries  in  violation  of  47  U.  S.  C.    308(  b)  and  47  C.  F.  R.    1.17. 

 The  Commission  makes  this  determination  in  the  face  of  a  contrary  decision  and 
 express  findings  by  the  ALJ.  That  ALJ,  Judge  Chachkin,  found  that  the  Bureau  was 
 engaged  in  a  fishing  expedition  with  the  hope  that  something  would  turn  up,  that  Kay 
 was  being  asked  to  provide  virtually  every  detail  regarding  the  operation  of  his 
 business[,]  .  .  .  include[  ing]  sensitive  information  such  as  his  entire  customer  list  and 
 details  regarding  the  technical  configuration  of  each  of  his  customers  system[  s],  and 
 that  all  of  Kays  reasonable  requests  for  modification  of  the  extremely  broad  inquiry 
 were  arbitrarily  ignored.  James  A.  Kay,  Jr.,  Licensee  of  One  Hundred  Fifty  Two  Part  90 
 Licenses  in  the  Los  Angeles,  California  Area,  Initial  Decision  of  Chief  Administrative 
 Law  Judge  Joseph  Chachkin,  WT  Docket  No.  94-  147,  FCC  99D-  04,    179  (  Chachkin 
 Decision).  In  addition,  Judge  Chachkin  found  that  the  Bureaus  request  for  information 
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 was  received  by  Kay  only  two  weeks  after  the  Northridge  earthquake,  a  devastating 
 natural  disaster  that  did  substantial  damage  to  his  business  and  personal  residence  and 
 that,  ultimately,  Kay  turned  over  some  36,000  documents.  Id.    180.  Finally,  Judge 
 Chachkin  ruled  that  Kays  actions  were  based  on  legitimate  concerns  in  Kays  mind 
 whether  the  data  sought  would  be  kept  confidential  (id.    181),  because,  among  other 
 things,  Kays  competitors  had  received  a  copy  of  the  Bureaus  inquiry  letter  to  Kay  (id. 
   29)  and  the  Bureau  at  one  point  demanded  50  copies  of  Kays  response  (id.    181). 

 In  my  view,  the  Commission  goes  too  far  in  reversing  Judge  Chachkins 
 conclusions.  There  can  be  no  question  that  Kay  and  the  Bureau  were  engaged  in  a  heated 
 dispute.  Judge  Chachkin  made  a  number  of  factual  determinations  to  resolve  that  dispute 
 and  determine  that  Kay  did  not  violate  the  statute  or  Commission  rules.  In  such 
 situations,  I  am  reluctant  to  reverse  an  ALJs  determinations  based  on  a  cold  record.  It  is 
 well  established  that,  generally,  the  initial  trier  of  fact  is  closer  to  the  course  of  the 
 litigation,  Bonds  v.  District  of  Columbia,  93  F.  3d  801,  808  (D.  C.  Cir.  1996),  and  has  a 
 better  feel  .  .  .  for  the  litigation  than  a  reviewing  tribunal,  Founding  Church  of 
 Scientology  v.  Webster,  802  F.  2d  1448,  1457  (D.  C.  Cir.  1986).  Thus,  the  Commission 
 routinely  defers  to  the  ALJ  on  these  sorts  of  decisions.  See,  e.  g.,  Applications  of  WWOR-TV, 
 Inc.  for  Renewal  of  License  of  Station  WWOR(  TV),  Secaucus,  New  Jersey  and 
 Garden  State  Broadcasting  Limited  Partnership  for  Construction  Permit,  Secaucus,  New 
 Jersey,  Memorandum  Opinion  and  Order,  5  FCC  Rcd  4113,    11  (1990)  ([  W]  e  are 
 reluctant  to  reverse  the  ALJ,  to  whom  broad  discretion  is  ceded  in  ordering 
 discovery  .  .  .  .);  Applications  of  Mid-  Ohio/  Capitol  Communications  Limited 
 Partnership  et  al.  for  Construction  Permit  for  a  New  FM  station  on  Channel  298A  in 
 Columbus,  Ohio,  Memorandum  Opinion  and  Order,  4  FCC  Rcd  8125,    6  (1989)  ([  T]  he 
 Commission  routinely  entrusts  the  determination  of  the  scope  of  such  discovery  in 
 comparative  hearings  to  the  broad  discretion  of  the  ALJ.).  Indeed,  this  principle  of 
 deference  extends  well  beyond  the  FCC;  in  the  similar  arena  of  discovery  disputes, 
 appellate  tribunals  traditionally  afford  great  deference  to  the  decisions  of  the  trial  court. 
 See,  e.  g.,  United  States  v.  Davis,  244  F.  3d  666,  670  (8th  Cir.  2001)  (  The  district  court 
 has  broad  discretion  in  imposing  sanctions  on  parties  for  failing  to  comply  with  discovery 
 orders.);  accord  Bonds,  93  F.  3d  at  807.  Accordingly,  on  this  record,  I  would  not  have 
 reversed  the  ALJs  decision. 

 II.  Lack  of  Candor 
 The  Commissions  lack  of  candor  decisions  against  Kay  and  Sobel  stem  from 
 other  events  in  this  case.  During  the  course  of  the  Bureaus  investigation  of  Kay,  it 
 received  information  indicating  that  Kay  may  have  conducted  business  under  several 
 other  peoples  names,  including  Marc  Sobels.  The  Commission  thus  included  Sobels 
 licenses  in  the  order  designating  Kays  licenses  for  hearing.  Kay  filed  a  motion  to 
 remove  Sobels  licenses  from  the  hearing  designation  and  attached  an  affidavit  signed  by 
 Sobel  stating  that  Kay  had  no  interest  in  any  of  Sobels  stations.  Based  on  this 
 submission,  the  Commission  removed  Sobels  licenses  from  the  Kay  proceeding. 
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 The  Bureau  subsequently  discovered  that  Kay  operated  a  number  of  Sobels 
 stations  pursuant  to  a  management  agreement.  Accordingly,  the  Commission  designated 
 Sobels  licenses  for  hearing,  asking  whether  Sobel  had  engaged  in  misrepresentation  or 
 lack  of  candor.  The  ALJ  assigned  to  Sobels  case,  Judge  Frysiak,  concluded  that  Sobels 
 actions  showed  a  lack  of  candor.  Judge  Frysiak  based  that  determination  on,  among  other 
 things,  statements  in  the  affidavit  and  on  Sobels  apparent  failure  to  provide  the  Bureau 
 the  management  agreement  in  a  timely  manner. 

 However,  Judge  Chachkin,  in  later  reviewing  the  same  conduct  in  Kays  case, 
 came  to  the  opposite  conclusion.  Judge  Chachkin  found  that  Kay  understood  the 
 affidavits  statement  that  Kay  had  no  interest  in  any  of  Sobels  stations  to  mean  that  Kay 
 had  no  ownership  interest  in  any  licenses  that  were  issued  to  Sobel.  Chachkin  Decision 
   216.  Judge  Chachkin  determined  that  Kay  was  specifically  advised,  by  counsel,  that 
 .  .  .  the  management  agreement  did  not  constitute  an  interest.  Id.    172.  He  thus 
 concluded  that  Kays  testimony  as  to  what  he  meant  by  the  word  interest  and  the 
 phrase  stations  or  licenses  is  entirely  reasonable  and  credible.  Id.    216. 

 Judge  Chachkin  also  found  that  Kays  and  Sobels  actions  showed  no  intent  to 
 deceive  the  Bureau  or  conceal  the  management  agreement.  He  pointed  out  that  Kay  and 
 Sobel  provided  the  management  agreement  to  the  Bureau  just  two  months  after  they  filed 
 the  challenged  motion  and  accompanying  affidavit,  long  before  anyone  raised  any 
 questions  about  lack  of  candor.  Id.    217. 

 Finally,  Judge  Chachkin  addressed  Judge  Frysiaks  prior  decision  on  the  lack  of 
 candor  issue  and  concluded  that  Judge  Frysiak  had  been  misled  by  the  Bureau.  Judge 
 Chachkin  explained  that,  although  Kay  had  provided  the  Bureau  a  copy  of  the 
 management  agreement  in  March  of  1995,  the  Bureau  represented  to  Judge  Frysiak  that 
 no  copy  was  provided  until  late  1996.  Id.    210.  There  is  no  doubt,  Judge  Chachkin 
 concluded,  that  [Judge  Frysiaks]  ultimate  conclusion  that  Sobel  made 
 misrepresentations  and  lacked  candor  .  .  .  was  based  on  his  erroneous  assumption  as  to 
 when  the  Agreement  was  given  to  the  Bureau.  Id.    210. 

 Based  on  these  conflicting  decisions  and  on  Judge  Chachkins  view  that  Judge 
 Frysiak  was  misled,  I  cannot  support  this  decision.  As  the  Commission  acknowledges, 
 determinations  of  credibility  must  rest  in  large  part  on  factual  determinations  made  by  an 
 ALJ.  I  am  unable,  on  the  record  before  us,  to  reconcile  the  ALJs  conflicting  decisions 
 and  determine  that  Judge  Frysiak  was  not  misled.  1  Particularly  given  the  severity  of  the 
 sanctions  at  issue,  I  would  not  find  that  Kay  and  Sobel  lacked  candor. 

 1  I  also  take  issue  with  the  Commissions  conclusion  that  Judge  Frysiak  would  not  have  made  a  different 
 decision  had  he  known  Kay  and  Sobel  provided  the  Bureau  a  copy  of  the  management  agreement  in  March 
 of  1995,  long  before  lack  of  candor  was  an  issue.  Judge  Frysiaks  decision  explicitly  rests  in  part  on  the 
 determination  that  even  though  the  Management  Agreement  fully  disclosed  their  relationship,  Sobel  did 
 not  voluntarily  submit  it  to  the  Commission  until  requested  by  the  Commission  to  do  so  in  [1996].  Marc 
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 III.  Conclusion 
 At  best,  this  is  a  case  of  conflicting  opinions  by  ALJs  that  ought  to  be  remanded 
 to  a  third  ALJ  to  reconcile  their  determinations.  Even  worse,  however,  this  case  involves 
 allegations  that  Commission  staff  misled  a  judge  into  reaching  an  erroneous  conclusion. 
 While  I  am  confident  that  Commission  staff  engaged  in  no  misconduct  in  this  case,  we  do 
 them  a  disservice  by  depriving  them  of  an  opportunity,  in  a  new  hearing,  to  explain  what 
 occurred.  Such  a  hearing  would  defend  the  reputation  of  our  staff  and  ensure  the 
 integrity  of  our  process.  Thus,  for  all  of  these  reasons,  the  more  reasonable  course  would 
 be  to  refer  this  case  for  a  hearing  in  front  of  a  new  ALJ.  Accordingly,  I  dissent  from 
 parts  IV,  VII,  VIII,  and  IX  of  the  Kay  Order  and  from  parts  V,  VI,  and  VII  of  the  Sobel 
 Order.  I  concur  with  respect  to  the  other  parts  of  these  Orders. 

 Sobel  and  Marc  Sobel  d/  b/  a  Air  Wave  Communications,  Licensee  of  Certain  Part  90  Stations  in  the  Los 
 Angeles  Area,  Decision,  WT  Docket  No.  97-  56,  FCC  97D-  13,    74.  While  this  may  not  have  been  the 
 largest  factor  in  Judge  Frysiaks  decision,  I  find  it  impossible  to  assess  its  impact  after  the  fact.  I  do  not 
 understand  how  my  colleagues,  on  the  record  before  us,  can  make  such  a  conclusion  on  Judge  Frysiaks 
 state  of  mind. 
38