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                                 Before the
                      Federal Communications Commission
                          Washington, D.C. 20554
In the Matter of Liability of           )
                                     )
SECOND GENERATION OF IOWA, LTD.     )
                                     )
Licensee of Television Station       )
KFXA(TV), Cedar Rapids, Iowa         )
Facility I.D. No. 35336             )
                                     )
for a Forfeiture                        )
                  MEMORANDUM OPINION AND ORDER
                      AND FORFEITURE ORDER
   Adopted:  May 31, 2000               Released:  June 1, 2000
By the Chief, Mass Media Bureau:
     1.  The Commission, by the Chief, Mass Media Bureau, acting pursuant to authority delegated by
Section 0.283 of the Commission's Rules, 47 C.F.R.  0.283, has before it for consideration the following
documents: (1) a Notice of Apparent Liability for forfeiture in the amount of seven thousand, five hundred
dollars ($7,500) issued against Second Generation of Iowa, Ltd. (Second Generation), licensee of station
KFXA(TV), Cedar Rapids, Iowa, in Second Generation  of  Iowa, Ltd. (KFXA(TV)), 13 FCC Rcd 3055
(MMB 1998) (KFXA(TV) NAL);  and (2) Second Generation's Petition for Reconsideration requesting
rescission or reduction of the forfeiture (Petition). The forfeiture was assessed for station KFXA(TV)'s
apparent repeated violation of Section 73.670 of the Commission's Rules, 47 C.F.R.  73.670, which
limits the amount of commercial matter that may be aired during children's television programming.
     2.  In KFXA NAL, we found that station KFXA(TV)'s record of exceeding the Commission's
commercial limits on three occasions during the last license term constituted a repeated violation of
Section 73.670 of the Commission's Rules.  Accordingly, pursuant to Section 503(b) of the
Communications Act of 1934, as amended, 47 U.S.C.  503(b), Second Generation was advised of its
apparent liability for forfeiture in the amount of $7,500.  That amount was reached after consideration of
the factors set forth in Section 503(b)(2) of the Communications Act, and, in particular, the five criteria
consisting of: (1) the number of instances of commercial overages; (2) the length of each overage; (3) the
period of time over which the overages occurred; (4) whether or not the licensee established an effective
program to ensure compliance; and (5) the specific reasons that the licensee gave for the overages.  We
applied these criteria to the facts of station KFXA(TV)'s case, considering the violations reported by
Second Generation, namely three program-length commercials, the category of violations over which
Congress expressed particular concern because  young  children  often  have  difficulty distinguishing
between commercials and programs.  Based on  the  number  and  type  of  violations,  which occurred
over a four-day period, we concluded that children had been subjected to commercial matter greatly in
excess of the limits contemplated by Congress when it enacted the Children's Television Act of 1990.
We also noted the Commission's statement made at the time it delayed the effective date of Section
73.670 of the Rules from October 1, 1991, until January 1, 1992, that "giving the additional time to
broadcasters and cable operators before compliance with the commercial limits is required will have the
effect of enabling broadcasters and cable operators to hone their plans to ensure compliance . . . ."  In
doing so, we rejected inadvertent error, the reason Second Generation gave to explain the program-length
commercials, as a basis for excusing station KFXA(TV)'s violations of the commercial limits.  We added
that, though station KFXA(TV) implemented procedures to prevent future violations of the children's
television commercial limitations, this did not relieve Second Generation of liability for the violations
which had occurred.
     3.  In its Petition, Second Generation contends that the amount of the forfeiture assessed in
KFXA(TV) is excessive when compared to the nature of the violations and the size of the forfeitures the
Commission has imposed in other cases.  Upon such comparison, Second Generation argues, "it is clear
that the Commission has given no meaningful consideration" to the factors set forth in Section 503 of the
Communications Act, particularly whether or not the licensee had established an effective program to
ensure compliance.  In this regard, Second Generation maintains that, though initially not perfect, station
KFXA(TV)'s procedures enabled the quick discovery of the error which caused the three program-length
commercials, and criticizes us for failing to mention this in KFXA NAL.  Second Generation also criticizes
us for failing to mention that, once the error was discovered, station KFXA(TV) adopted additional, more
stringent screening procedures which effectively prevented any further violations. In contrast, Second
Generation asserts, in the cases it cites supra n. 4, the licensees had no procedures to protect against
commercial overages and, in some instances, failed to take effective actions to prevent further violations.
Accordingly, Second Generation submits that the "alacrity" by which station KFXA(TV) acted and the
effectiveness of its additional measures are "mitigating factors which, when properly weighed, should
reduce the penalty for the violation to a mere admoition [sic]."
     4.  Second Generation also argues that the characterization of station KFXA(TV)'s violations as
"repeated" and "substantial" does not fit the facts.  Technically, Second Generation concedes, the fact that
program-length commercials occurred on three occasions constitutes a repeated violation.  Nevertheless,
Second Generation opines, more salient are the following facts: that all three violations involved a single
commercial and occurred over a very short period of time, and that prompt, effective measures were
taken to ensure that the violation would not be repeated in the future.  Along this line, Second Generation
maintains, the Commission has found a violation of the commercial limits to be repeated when there had
been a large number of commercial overages, and only moderately higher forfeitures have been imposed
in other cases involving "much more numerous and long lasting violations."  For these reasons, Second
Generation believes that station KFXA(TV)'s violations were "minor," not "substantial," and, therefore,
warrant a minor sanction rather than a substantial fine.
     5.  Finally, Second Generation says that it "does not claim that it is 'financially unable' to pay a
$7,500 forfeiture," but avers that the imposition of any forfeiture would have a serious adverse impact on
station KFXA(TV)'s ability to serve the public interest because the station has suffered continuing losses.
In support, Second Generation provides unaudited financial statements, asserting that station KFXA(TV)
lost $1,422,496 in 1996, and $1,460,673 in 1997.  Second Generation adds that, at the time it acquired
station KFXA(TV) in 1995, the station had been dark for  an  extended period  of  time  and  its  former
licensee  was  on  the  brink  of   bankruptcy.  Furthermore, in order to make station KFXA(TV)
competitive and economically viable, Second Generation claims to have invested substantial sums in
marketing, programming, promotions and improving the station's facilities.  For all of these reasons,
Second Generation concludes that the forfeiture assessed in KFXA NAL should be reconsidered and
rescinded, and that no more than an admonition or, at most, a nominal fine should be imposed.
                                DISCUSSION
     6.  Preliminarily, we note that Section 503 of the Communications Act affords the
Commission a great deal of discretion in determining forfeiture amounts based upon all of the
circumstances of each individual case.  Given that discretion, we disagree with Second Generation's
claim that the assessment of a $7,500 forfeiture against it is excessive in light of the amount of the
forfeitures assessed in other cases, and we reject Second Generation's attempt to make a violation-
by-violation comparison with those cases.  In determining the forfeiture against Second Generation,
we considered the factors set forth in Section 503 of the Communications Act, and compared the
actions of Second Generation with the actions of licensees involved in similar cases.  We did not
assess a separate forfeiture amount for each violation, nor can Second Generation's actions be
dissected in such a manner.  Rather, we concluded that, as a whole, the facts of this case and
relevant case law supported a $7,500 forfeiture against Second Generation. In this regard, the
forfeiture at issue here is consistent with that imposed in a very similar case.  In LeSea Broadcasting
Corp. (WHKE(TV)), 10 FCC Rcd 4977 (MMB 1995) (LeSea Broadcasting), which we referred to
in KFXA(TV) NAL, we assessed a $7,500 forfeiture for three program-length commercials which
occurred over a period of approximately two months.  The licensee in LeSea Broadcasting
attributed its violations to human error, and indicated that its station's compliance procedures were
modified and/or its personnel was instructed to prevent recurrence.  Compared to the station in
LeSea Broadcasting, station KFXA(TV) reported the same number and type of violations.  In
addition, Second Generation and the licensee in LeSea Broadcasting gave essentially the same
reasons to explain their respective violations, which in both cases occurred over a short period of
time.  We stated in each case, moreover, that though the licensee may have implemented a plan or
policies to prevent future violations, that did not relieve it of liability for the violations which had
occurred.  Having thus considered the Section 503 factors, as well as the similarities between their
application in this case and in LeSea Broadcasting, where a $7,500 forfeiture was imposed, it was
both appropriate and within our discretion to assess a comparable forfeiture in the amount of $7,500
against Second Generation.  Accordingly, Second Generation's assertion that the forfeiture assessed
in KFXA NAL should be rescinded and replaced with a letter of admonition, is without merit and
shall be denied.
     7.  Also with respect to its excessive forfeiture argument, Second Generation's Petition apparently
misconceives the seriousness with which the Commission has consistently considered and treated
program-length commercials.  When the Commission adopted its children's television commercial rules
and policies pursuant to the Children's Television Act of 1990, the Commission specifically provided
that, where a program is determined to be a program-length commercial, the entire program "would
count toward the statutory commercial limits."  In Children's Television Programming, the Commission
made it abundantly clear that, independent of their duration, program-length commercials, by their very
nature, are extremely serious, and that its program-length commercial policy "directly addresses a
fundamental regulatory concern, that children who have difficulty enough distinguishing program content
from unrelated commercial matter, not be all the more confused  by a show that interweaves program
content and commercial matter."  To this end, in numerous cases assessing forfeitures for violations of
the children's television commercial limits, the Commission has stated that, "Congress was particularly
concerned about program-length commercials because young children often have difficulty distinguishing
between commercials and programs."  In accordance with this policy of treating program-length
commercials as extremely serious violations of the children's television commercial limitations, the
Commission has routinely assessed higher forfeitures for program-length commercials than for a
significantly greater number of conventional overages.  Therefore, we find our consideration of station
KFXA(TV)'s three program-length commercials as substantial violations to be consistent with
Commission policy and precedent.
     8.  Likewise, we affirm our determination that station KFXA(TV)'s three program-length
commercials constituted a repeated violation of Section 73.670 of the Commission's Rules. Clearly,
station KFXA(TV) repeatedly violated the commercial limits, as a program-length commercial occurred
on more than one occasion.  In fact, Second Generation concedes that the violations were "technically"
repeated, but suggests that a violation be deemed "repeated" only in those cases involving a large number
of commercial overages.  We decline to adopt such an approach here, and note that the Commission has
consistently found a repeated violation of the commercial limits in cases where a licensee reports more
than one conventional overage or program-length commercial.
     9.  Finally, with respect to financial hardship, we note that the Commission has previously
considered a licensee's financial inability to pay as a basis for reducing a forfeiture.  Here, you do not
claim financial inability to pay a forfeiture, but assert that station KFXA(TV) has suffered continuing
losses.  However, in analyzing a company's financial condition for forfeiture purposes, the
Commission has stated that "[if] gross revenues are sufficiently great . . . the mere fact that a business
is operating at a loss does not by itself mean that it cannot afford to pay a forfeiture." PJB
Communications of Virginia, Inc., 7 FCC Rcd 2088, 2089 (1992).  Our review of the financial data filed
by Second Generation indicates that, although the company shows losses of $1,460,673 in 1997, its gross
revenue was $3,716,348.  We find this gross revenue sufficiently great to accommodate payment of the
forfeiture assessed against station KFXA(TV), which, at $7,500, is the lowest forfeiture amount assessed
for violations of the children's television commercial limits.  Therefore, given the totality of the facts and
circumstances before us, we do not believe that eliminating or reducing the $7,500 forfeiture is warranted.
     10.  Accordingly, IT IS ORDERED THAT the Petition for Reconsideration filed by Second
Generation of Iowa, Ltd., requesting that the forfeiture assessed in Second Generation of Iowa, Ltd.
(KFXA(TV)), 13 FCC Rcd 3055 (MMB 1998), be reduced or eliminated, IS DENIED.
     11.  IT IS FURTHER ORDERED THAT, pursuant to Section 503(b) of the Communications
Act of 1934, as amended, 47 U.S.C.  503(b), Second Generation of Iowa, Ltd., licensee of television
station KFXA(TV), Cedar Rapids, Iowa, FORFEIT to the United States the sum of seven thousand, five
hundred dollars ($7,500) for repeated violations of Section 73.670 of the Commission's Rules, 47 C.F.R.
 73.670.  Payment of the forfeiture may be made by mailing to the Commission a check or similar
instrument payable to the Federal Communications Commission.  With regard to this forfeiture
proceeding, Second Generation of Iowa, Ltd., may take any of the actions set forth in Section 1.80 of the
Commission's Rules, 47 C.F.R.  1.80, as summarized in the attachment to this Memorandum Opinion
and Order.
                         FEDERAL COMMUNICATIONS COMMISSION
                         Roy J. Stewart
                         Chief, Mass Media Bureau
cc:  David Tillotson, Esq.