*Pages 1--7 from  Microsoft Word - 47140.doc*
 Federal  Communications  Commission  DA  05-  725 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 
 In  the  Matter  of 
 Caguas  Educational  TV,  Inc. 
 Licensee  of  Noncommercial  Educational  Station  WLAZ(  FM),  Kissimmee,  Florida 


 )  ) 
 )  ) 
 )  ) 
 EB-  04-  IH-  0382  Facility  ID  No.  27292 
 NAL/  Account  No.  200532080130  FRN  0008628646 


 NOTICE  OF  APPARENT  LIABILITY  FOR  FORFEITURE 
 Adopted:  March  17,  2005  Released:  March  17,  2005 
 By  the  Chief,  Enforcement  Bureau: 
 I.  INTRODUCTION 
 1.  In  this  Notice  of  Apparent  Liability  for  Forfeiture  (  NAL),  we  find  that  Caguas  Educational  TV,  Inc.  (  Caguas),  licensee  of  noncommercial  educational  Station  WLAZ(  FM), 
 Kissimmee,  Florida,  has  apparently  violated  section  399B  of  the  Communications  Act  of  1934,  as  amended  (the  Act),  1  and  section  73.503  of  the  Commission's  rules,  2  by  willfully  and  repeatedly 
 broadcasting  prohibited  advertisements.  Based  upon  our  review  of  the  facts  and  circumstances  of  this  case,  we  conclude  that  Caguas  is  apparently  liable  for  a  monetary  forfeiture  in  the  amount  of 
 $10,000. 
 II.  BACKGROUND 
 2.  This  case  arises  from  a  complaint  made  to  the  Commission  in  July  2004  (  Complaint),  alleging  that  noncommercial  educational  Station  WLAZ(  FM)  broadcast 
 prohibited  underwriting  announcements  during  the  month  of  May  2004.  Thereafter,  the  Bureau  inquired  of  the  licensee  concerning  the  allegations  contained  in  the  complaint.  3  Caguas 
 responded  to  the  LOI  on  November  22,  2004.  4 


 1  47  U.  S.  C.    399b. 
 2  47  C.  F.  R.    73.503. 
 3  Letter  from  William  D.  Freedman,  Deputy  Chief,  Investigations  and  Hearings  Division,  Enforcement 
 Bureau,  to  Caguas,  dated  October  7,  2004  (  LOI). 


 4  Letter  from  Francisco  R.  Montero,  Esq.,  and  Alison  J.  Miller,  Esq.,  to  Kenneth  M.  Scheibel,  Jr.,  Attorney, 
 Investigations  and  Hearings  Division,  Enforcement  Bureau,  dated  November  22,  2004  (  Response). 
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 III.  DISCUSSION 
 3.  Under  section  503(  b)(  1)  of  the  Act,  any  person  who  is  determined  by  the  Commission  to  have  willfully  or  repeatedly  failed  to  comply  with  any  provision  of  the  Act  or  any 
 rule,  regulation,  or  order  issued  by  the  Commission  shall  be  liable  to  the  United  States  for  a  forfeiture  penalty.  5  In  order  to  impose  such  a  penalty,  the  Commission  must  issue  a  notice  of 
 apparent  liability,  the  notice  must  be  received,  and  the  person  against  whom  the  notice  has  been  issued  must  have  an  opportunity  to  show,  in  writing,  why  no  such  penalty  should  be  imposed.  6 
 The  Commission  will  then  issue  a  forfeiture  if  it  finds,  by  a  preponderance  of  the  evidence,  that  the  person  has  willfully  or  repeatedly  violated  the  Act  or  a  Commission  rule.  7  As  described  in 
 greater  detail  below,  we  conclude  under  this  procedure  that  Caguas  is  apparently  liable  for  a  forfeiture  in  the  amount  of  $10,000  for  its  apparent  willful  and  repeated  violations  of  the 
 Commissions  underwriting  rules. 
 A.  Caguas  Has  Willfully  and  Repeatedly  Broadcast  Advertisements  in  Violation  of  Section  399B  of  the  Act  and  Section  73.503  of  the  Commissions  Rules 


 4.  Advertisements  are  defined  by  the  Act  as  program  material  broadcast  "in  exchange  for  any  remuneration"  and  intended  to  "promote  any  service,  facility,  or  product"  of  for-  profit 
 entities.  8  The  pertinent  statute  specifically  provides  that  noncommercial  educational  stations  may  not  broadcast  advertisements.  9  Although  contributors  of  funds  to  such  stations  may  receive  on-  air 
 acknowledgements,  the  Commission  has  held  that  such  acknowledgements  may  be  made  for  identification  purposes  only,  and  should  not  promote  the  contributors'  products,  services,  or 
 businesses.  10  Specifically,  such  announcements  may  not  contain  comparative  or  qualitative 


 5  47  U.  S.  C.    503(  b)(  1)(  B);  47  C.  F.  R.    1.80(  a)(  1);  see  also  47  U.  S.  C.    503(  b)(  1)(  D)  (forfeitures  for 
 violation  of  14  U.  S.  C.    1464).  Section  312(  f)(  1)  of  the  Act  defines  willful  as  the  conscious  and  deliberate  commission  or  omission  of  [any]  act,  irrespective  of  any  intent  to  violate  the  law.  47  U.  S.  C.   


 312(  f)(  1).  The  legislative  history  to  section  312(  f)(  1)  of  the  Act  clarifies  that  this  definition  of  willful  applies  to  both  sections  312  and  503(  b)  of  the  Act,  H.  R.  Rep.  No.  97-  765,  97  th  Cong.  2d  Sess.  51  (1982), 
 and  the  Commission  has  so  interpreted  the  term  in  the  section  503(  b)  context.  See,  e.  g.,  Application  for  Review  of  Southern  California  Broadcasting  Co.,  Memorandum  Opinion  and  Order,  6  FCC  Rcd  4387, 
 4388  (1991)  (  Southern  California  Broadcasting  Co.).  The  Commission  may  also  assess  a  forfeiture  for  violations  that  are  merely  repeated,  and  not  willful.  See,  e.  g.,  Callais  Cablevision,  Inc.,  Grand  Isle, 
 Louisiana,  Notice  of  Apparent  Liability  for  Monetary  Forfeiture,  16  FCC  Rcd  1359  (2001)  (issuing  a  Notice  of  Apparent  Liability  for,  inter  alia,  a  cable  television  operators  repeated  signal  leakage). 
 Repeated  means  that  the  act  was  committed  or  omitted  more  than  once,  or  lasts  more  than  one  day.  Southern  California  Broadcasting  Co.,  6  FCC  Rcd  at  4388,    5;  Callais  Cablevision,  Inc.,  16  FCC  Rcd  at 
 1362    9. 
 6  47  U.  S.  C.    503(  b);  47  C.  F.  R.    1.  80(  f). 


 7  See,  e.  g.,  SBC  Communications,  Inc.,  Forfeiture  Order,  17  FCC  Rcd  7589,  7591    4  (2002)  (forfeiture 
 paid). 
 8  47  U.  S.  C.    399b(  a). 


 9  Id. 
 10  See  In  the  Matter  of  the  Commission  Policy  Concerning  the  Noncommercial  Nature  of  Educational 
 Broadcasting  Stations,  Public  Notice  (1986),  republished,  7  FCC  Rcd  827  (1992)  (  Public  Notice). 
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 descriptions,  price  information,  calls  to  action,  or  inducements  to  buy,  sell,  rent  or  lease.  11  At  the  same  time,  however,  the  Commission  has  acknowledged  that  it  is  at  times  difficult  to  distinguish 
 between  language  that  promotes  versus  that  which  merely  identifies  the  underwriter.  Consequently,  the  Commission  expects  only  that  licensees  exercise  reasonable,  good  faith  judgment  in  this 
 area.  12 
 5.  At  issue  here  are  two  underwriting  announcements  that  Caguas  admits  that  Station  WLAZ(  FM)  repeatedly  broadcast  from  April  1  through  September  30,  2004.  13  Caguas 
 acknowledges  that  it  received  consideration  for  airing  the  messages  on  behalf  of  the  stations  underwriters,  Sol  De  Borinquen  Bakery  and  Wandas  Quality,  that  both  are  for-  profit  entities,  and 
 that  the  two  messages  were  repeated  a  total  of  404  and  1267  times,  respectively,  during  this  period.  14  Although  Caguas  claims  that  it  was  under  no  obligation  to  broadcast  underwriting 
 announcements  on  behalf  of  Wandas  Quality,  the  licensee  represents  that  it  did  so  as  a  courtesy  to  recognize  the  donor  for  providing  the  station  with  giveaway  items  that  it,  in  turn, 
 used  for  self-  promotion.  15 
 6.  The  announcements  were  broadcast  in  Spanish,  and  Caguas  notes  that  its  own  translation  of  the  Sol  de  Borinquen  Bakery  announcement  is  slightly  different  from  that  which  the 
 Bureau  included  with  its  LOI.  16  Having  reviewed  Caguass  version,  we  do  not  believe  that  it  substantially  alters  the  overall  context  or  meaning  of  the  underwriting  message.  However,  we 
 accept  Caguass  alternate  text  insofar  as  it  represents  the  purported  basis  by  which  it  claims  to  have  attempted  to  exercise  its  good  faith  discretion  under  Xavier,  supra.  Thus,  we  have  revised 
 our  attached  transcripts  to  reflect  Caguass  translation  of  the  Sol  de  Borinquen  Bakery  announcement. 


 7.  After  careful  review  of  the  record  in  this  case,  we  find  that  both  announcements  apparently  exceed  the  bounds  of  what  is  permissible  under  section  399B  of  the  Act,  and  the 
 Commissions  pertinent  rules  and  policies,  in  light  of  the  good  faith  discretion  afforded  licensees  under  Xavier,  supra.  The  announcement  for  Wandas  Quality  states  that  the  company 
 has  the  biggest  variety  of  undershirts,  polos,  short  and  long  sleeve  oxford  shirts,  and  that  they  are  [  t]  he  people  that  know  most  about  embroidery  and  printing.  17  The  announcement  for  Sol  de 
 Borinquen  Bakery  asserts  that  it  is  the  greatest  bakery  in  Kissimmee;  and  that  it  offers  its  famous  frappe.  18  We  conclude  that  a  noncommercial  licensee,  exercising  good  faith,  could 


 11  Id. 
 12  See  Xavier  University,  Letter  of  Admonition,  issued  November  14,  1989  (Mass  Med.  Bur.),  recon.  granted, 
 Memorandum  Opinion  and  Order,  5  FCC  Rcd  4920  (1990). 
 13  Response  at  Exhibit  A. 


 14  Id.  at  3,  4. 
 15  Id.  at  4.  Caguas  indicates  that  Wandas  Quality  from  time  to  time  provided  the  station  with  t-  shirts 
 which  bore  the  stations  logo.  Id. 


 16  Id.  at  2.  Caguas  does  not  dispute  the  translation  of  the  Wandas  Quality  announcement  also  contained  in 
 the  LOI.  Id. 


 17  See  Attachment. 


 18  Id. 
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 only  conclude  that  the  above  statements  make  qualitative  and  comparative  references  to  Wandas  Quality  and  to  Sol  de  Borinquen  Bakery,  and  that,  in  particular,  the  words  and/  or  phrases 
 biggest,  people  that  know  most,  and  greatest,  impermissibly  seek  to  distinguish  the  underwriters  products  and/  or  service  favorably  from  that  of  their  competitors.  The 
 announcements  are  thus  promotional  and  prohibited.  19 
 8.  We  further  find  that  the  announcements  in  question  were  broadcast  in  exchange  for  consideration.  First,  Caguas  acknowledges  that  it  aired  the  announcements  for  Sol  de 
 Borinquen  Bakery  on  the  basis  of  one  announcement  for  each  $10  contributed.  20  With  respect  to  the  arrangement  between  Wandas  Quality  and  Caguas,  consideration,  for  purposes  of  section 
 399B  of  the  Act,  may  take  forms  other  than  direct  cash  payments.  21  Caguas  admits  that  it  aired  the  announcements  to  acknowledge  that  underwriters  donation  of  t-  shirts  bearing  the  stations 
 logo,  although  it  was  not  obligated  to  do  so.  In  determining  whether  the  announcements  constituted  prohibited  advertisements  under  section  399B  of  the  Act,  it  is  sufficient  to  find  that 
 consideration  was  exchanged  for  their  broadcast,  and  that  the  announcements  promoted  the  services  or  products  of  for-  profit  entities.  22  It  is  not  necessary  to  find  that  the  licensee  was 
 contractually  obligated  to  pay  the  consideration.  Finally,  the  Commission  has  long  held  licensees  responsible  for  ensuring  that  any  material  broadcast  in  a  foreign  language  conforms  to  the 
 requirements  of  the  Act  and  the  Commissions  rules.  23  To  the  extent  that  Caguas  has  overlooked  its  duties  in  this  regard,  we  remind  it  to  take  appropriate  care  in  the  future  to  avoid  further 
 violations  of  this  type. 
 B.  Proposed  Action 
 9.  Section  503(  b)  of  the  Act  and  section  1.80(  a)  of  the  Commissions  rules  both  state  that  any  person  who  willfully  or  repeatedly  fails  to  comply  with  the  provisions  of  the  Act, 
 the  rules  or  Commission  orders  shall  be  liable  for  a  forfeiture  penalty.  24  The  Commissions  Forfeiture  Policy  Statement  sets  a  base  forfeiture  amount  of  $2,000  for  violation  of  the  enhanced 
 underwriting  requirements.  25  The  Forfeiture  Policy  Statement  also  provides  that  the  Commission 


 19  See  Public  Notice,  supra. 
 20  Response  at  4 
 21  See  Commission  Policy  Concerning  the  Noncommercial  Nature  of  Educational  Broadcast  Stations,  90  FCC 
 2d  895,  911  (1982),  recon.,  97  FCC  2d  255  (1984)  (  Policy  Statement). 


 22  Moreover,  in  similar  cases,  the  Commission  has  rejected  arguments  that  such  payments  constituted 
 general  station  contributions  unrelated  to  the  broadcast  of  underwriting  announcements  made  on  behalf  of  the  donors  involved.  See  Penfold  Communications,  Inc.,  Memorandum  Opinion  and  Order,  13  FCC  Rcd 


 23731  (Mass  Media  Bur.  1998). 
 23  See  Licensee  Responsibility  to  Exercise  Adequate  Control  Over  Foreign  Language  Programs,  Public 
 Notice,  39  FCC  2d  1037  (1973). 
 24  See  47  U.  S.  C.    503(  b);  47  C.  F.  R    1.80. 


 25  The  Commissions  Forfeiture  Policy  Statement  and  Amendment  of  Section  1.80  of  the  Rules  to 
 Incorporate  the  Forfeiture  Guidelines,  12  FCC  Rcd  17087,  17115  (1997)  (  Forfeiture  Policy  Statement),  recon.  denied  15  FCC  Rcd  303  (1999);  47  C.  F.  R.    1.  80(  b). 
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 shall  adjust  a  forfeiture  based  upon  consideration  of  the  factors  enumerated  in  section  503(  b)(  2)(  D)  of  the  Act,  such  as  the  nature,  circumstances,  extent  and  gravity  of  the  violation, 
 and,  with  respect  to  the  violator,  the  degree  of  culpability,  any  history  of  prior  offenses,  ability  to  pay,  and  such  other  matters  as  justice  may  require.  26 


 10.  In  this  case,  it  appears  that,  from  April  1  through  September  30,  2004,  Caguas  willfully  and  repeatedly  broadcast  advertisements  in  violation  of  section  399B  of  the  Act  and 
 section  73.503(  d)  of  the  Commissions  rules.  We  believe  that  a  substantial  forfeiture  is  necessary  because  of  the  substantial  period  of  time  during  which  it  aired  the  prohibited  announcements,  six 
 months,  and  the  1,671  times  that  it  repeated  the  announcements  during  that  period.  Nevertheless,  we  believe  if  we  simply  multiplied  the  $2,000  base  amount  by  the  1,671  apparent  violations,  the 
 potential  liability  would  be  excessive  in  this  case.  Based  on  all  of  the  circumstances,  and  after  examining  forfeiture  actions  in  other  recent  underwriting  cases,  we  believe  that  a  proposed 
 forfeiture  of  $10,000  is  appropriate  here.  27 
 11.  Accordingly,  applying  the  Forfeiture  Policy  Statement  and  the  statutory  factors  to  this  case,  we  conclude  that  Caguas  is  apparently  liable  for  a  forfeiture  in  the  amount  of 


 $10,000,  for  violating  the  Commissions  underwriting  rules.  We  will  not  hesitate  to  take  even  stronger  enforcement  action  against  noncommercial  educational  licensees  that  engage  in  similarly 
 serious  violations  of  our  underwriting  requirements. 
 IV.  ORDERING  CLAUSES 


 12.  In  view  of  the  foregoing,  we  conclude  that  a  monetary  sanction  is  appropriate.  Accordingly,  pursuant  to  section  503(  b)  of  the  Communications  Act  of  1934,  as  amended,  and 
 sections  0.111,  0.311  and  1.80  of  the  Commissions  rules,  Caguas  Educational  TV,  Inc.,  licensee  of  noncommercial  educational  Station  WLAZ(  FM),  Kissimmee,  Florida,  is  hereby  NOTIFIED  of  its 
 APPARENT  LIABILITY  FOR  A  FORFEITURE  in  the  amount  of  $10,000  for  willfully  and  repeatedly  broadcasting  advertisements  in  violation  of  section  399B  of  the  Act,  47  U.  S.  C.    399b, 
 and  section  73.  503  of  the  Commission's  rules,  47  C.  F.  R.    73.  503. 
 13.  IT  IS  FURTHER  ORDERED,  pursuant  to  section  1.80  of  the  Commissions  rules,  that  within  thirty  days  of  the  release  of  this  Notice,  Caguas  SHALL  PAY  the  full  amount  of 
 the  proposed  forfeiture  or  SHALL  FILE  a  written  statement  seeking  reduction  or  cancellation  of  the  proposed  forfeiture. 


 14.  Payment  of  the  forfeiture  must  be  made  by  mailing  a  check  or  similar  instrument,  payable  to  the  order  of  the  Federal  Communications  Commission.  The  payment  must  include  the 
 NAL  Acct.  No.  and  FRN  referenced  above.  Payment  by  check  or  money  order  may  be  mailed  to 


 26  47  U.  S.  C.    503(  b)(  2)(  D).  See  also  Forfeiture  Policy  Statement,  12  FCC  Rcd  at  17100    27. 
 27  See,  e.  g.,  Hispanic  Broadcast  System,  Inc.(  WQQZ(  FM)),  Notice  of  Apparent  Liability  for  Forfeiture,  DA 
 05-  349,__  FCC  Rcd__  (rel.  Feb.  9,  2005)  ($  10,  000  forfeiture  proposed  for  underwriting  violations),  response  pending;  Minority  Television  Project,  Inc.  (KMTP-  TV),  Notice  of  Apparent  Liability  for 


 Forfeiture,  DA  05-  348,__  FCC  Rcd__  (rel.  Feb.  9,  2005)  ($  7,500  forfeiture  proposed  for  underwriting  violations),  response  pending;  Christian  Voice  of  Central  Ohio,  Inc.(  WCVZ(  FM)),  19  FCC  Rcd  23663 
 (Enf.  Bur.  2004)  ($  20,  000  forfeiture  proposed  for  underwriting  violations),  response  pending;  Minority  Television  Project,  Inc.  (KMTP-  TV),  Forfeiture  Order,  18  FCC  Rcd  26611  (Enf.  Bur.  2003),  application 
 for  review  denied,  Order  on  Review,  19  FCC  Rcd  25116  (2004)  ($  10,  000  forfeiture  for  underwriting  violations),  recon.  pending. 
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 Forfeiture  Collection  Section,  Finance  Branch,  Federal  Communications  Commission,  P.  O.  Box  73482,  Chicago,  Illinois  60673-  7482.  Payment  by  overnight  mail  may  be  sent  to  Bank  One/  LB 
 73482,  525  West  Monroe,  8  th  Floor  Mailroom,  Chicago,  Illinois  60601.  Payment  by  wire  transfer  may  be  made  to  ABA  Number  071000013,  receiving  bank  Bank  One,  and  account  number 
 1165259. 
 15.  The  response,  if  any,  must  be  mailed  to  William  H.  Davenport,  Chief,  Investigations  and  Hearings  Division,  Enforcement  Bureau,  Federal  Communications 


 Commission,  445  12  th  Street,  S.  W,  Room  4-  C330,  Washington  D.  C.  20554  and  MUST  INCLUDE  the  NAL/  Acct.  No.  referenced  above. 


 16.  The  Commission  will  not  consider  reducing  or  canceling  a  forfeiture  in  response  to  a  claim  of  inability  to  pay  unless  the  respondent  submits:  (1)  federal  tax  returns  for  the  most 
 recent  three-  year  period;  (2)  financial  statements  prepared  according  to  generally  accepted  accounting  practices  (  GAAP);  or  (3)  some  other  reliable  and  objective  documentation  that 
 accurately  reflects  the  respondents  current  financial  status.  Any  claim  of  inability  to  pay  must  specifically  identify  the  basis  for  the  claim  by  reference  to  the  financial  documentation  submitted. 


 17.  Requests  for  payment  of  the  full  amount  of  this  Notice  of  Apparent  Liability  under  an  installment  plan  should  be  sent  to:  Chief,  Revenue  and  Receivables  Operations  Group, 
 445  12th  Street,  S.  W.,  Washington,  D.  C.  20554.  28 
 18.  IT  IS  FURTHER  ORDERED  that  a  copy  of  this  Notice  shall  be  sent,  by  Certified  Mail/  Return  Receipt  Requested,  to  Caguas  Educational  TV,  Inc.,  P.  O.  Box  3986,  Carolina,  Puerto 


 Rico  00984-  3986,  and  to  its  counsel,  Francisco  R.  Montero,  Esq.,  and  Alison  J.  Miller,  Esq.,  Fletcher,  Heald  &  Hildreth,  P.  L.  C.,  11  th  Floor,  1300  North  17  th  Street,  Arlington,  Virginia  22209- 
 3801. 
 FEDERAL  COMMUNICATIONS  COMMISSION 


 David  H.  Solomon  Chief,  Enforcement  Bureau 


 28  See  47  C.  F.  R.    1.1914. 
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 ATTACHMENT 
 The  following  text  was  transcribed  from  underwriting  announcements  broadcast  over  noncommercial  educational  Station  WLAZ(  FM),  Kissimmee,  Florida. 


 Wandas  Quality 
 Attention,  churches,  schools  and  businesses!  Already,  in  Orlando  embroidery  and  printing,  Wandas  Quality!  With  the  biggest  variety  of  undershirts,  polos,  short  and  long  sleeve  oxford 
 shirts,  in  all  sizes  for  boys,  ladies  and  gentlemen.  Likewise,  caps  and  promotional  articles.  Wandas  Quality!  Telephone  407-  301-  5854,  407-  301-  5854.  Wandas  Quality!  The  people  that 
 know  the  most  about  embroidery  and  printing.  Wandas  Quality.  Sponsored  by  Genesis. 
 Sol  de  Borinquen  Bakery 
 Sol  de  Borinquen  has  opened  its  doors,  the  greatest  bakery  in  Kissimmee.  Sol  de  Borinquen  Restaurant,  2510  Michigan  Avenue.  Breakfast,  lunch,  authentic  Caribbean  food,  the  famous 
 frappe,  hot  bread  (sobao  and  water).  Wedding  and  birthday  cakes,  Caribbean  style,  cheese  custard,  brazo  Gitano  and  many  other  authentic  Caribbean  foods.  Sol  de  Borinquen  Restaurant, 
 2510  Michigan  Avenue,  telephone  407-  518-  7755.  Open  from  6:  00  a.  m.  Sol  de  Borinquen,  an  authentic  Caribbean  bakery. 
7